[House Hearing, 108 Congress]
[From the U.S. Government Publishing Office]





                  STRENGTHENING AMERICA'S COMMUNITIES:

                  EXAMINING THE IMPACT OF FAITH-BASED

                          HOUSING PARTNERSHIPS

=======================================================================

                                HEARINGS

                               BEFORE THE

                            SUBCOMMITTEE ON
                   HOUSING AND COMMUNITY OPPORTUNITY

                                 OF THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                      ONE HUNDRED EIGHTH CONGRESS

                             FIRST SESSION

                               __________

                        MARCH 25, APRIL 28, 2003

                               __________

       Printed for the use of the Committee on Financial Services

                           Serial No. 108-14



89-410              U.S. GOVERNMENT PRINTING OFFICE
                            WASHINGTON : 2003
____________________________________________________________________________
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                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                    MICHAEL G. OXLEY, Ohio, Chairman

JAMES A. LEACH, Iowa                 BARNEY FRANK, Massachusetts
DOUG BEREUTER, Nebraska              PAUL E. KANJORSKI, Pennsylvania
RICHARD H. BAKER, Louisiana          MAXINE WATERS, California
SPENCER BACHUS, Alabama              CAROLYN B. MALONEY, New York
MICHAEL N. CASTLE, Delaware          LUIS V. GUTIERREZ, Illinois
PETER T. KING, New York              NYDIA M. VELAZQUEZ, New York
EDWARD R. ROYCE, California          MELVIN L. WATT, North Carolina
FRANK D. LUCAS, Oklahoma             GARY L. ACKERMAN, New York
ROBERT W. NEY, Ohio                  DARLENE HOOLEY, Oregon
SUE W. KELLY, New York, Vice         JULIA CARSON, Indiana
    Chairman                         BRAD SHERMAN, California
RON PAUL, Texas                      GREGORY W. MEEKS, New York
PAUL E. GILLMOR, Ohio                BARBARA LEE, California
JIM RYUN, Kansas                     JAY INSLEE, Washington
STEVEN C. LaTOURETTE, Ohio           DENNIS MOORE, Kansas
DONALD A. MANZULLO, Illinois         CHARLES A. GONZALEZ, Texas
WALTER B. JONES, Jr., North          MICHAEL E. CAPUANO, Massachusetts
    Carolina                         HAROLD E. FORD, Jr., Tennessee
DOUG OSE, California                 RUBEN HINOJOSA, Texas
JUDY BIGGERT, Illinois               KEN LUCAS, Kentucky
MARK GREEN, Wisconsin                JOSEPH CROWLEY, New York
PATRICK J. TOOMEY, Pennsylvania      WM. LACY CLAY, Missouri
CHRISTOPHER SHAYS, Connecticut       STEVE ISRAEL, New York
JOHN B. SHADEGG, Arizona             MIKE ROSS, Arkansas
VITO FOSELLA, New York               CAROLYN McCARTHY, New York
GARY G. MILLER, California           JOE BACA, California
MELISSA A. HART, Pennsylvania        JIM MATHESON, Utah
SHELLEY MOORE CAPITO, West Virginia  STEPHEN F. LYNCH, Massachusetts
PATRICK J. TIBERI, Ohio              BRAD MILLER, North Carolina
MARK R. KENNEDY, Minnesota           RAHM EMANUEL, Illinois
TOM FEENEY, Florida                  DAVID SCOTT, Georgia
JEB HENSARLING, Texas                ARTUR DAVIS, Alabama
SCOTT GARRETT, New Jersey             
TIM MURPHY, Pennsylvania             BERNARD SANDERS, Vermont
GINNY BROWN-WAITE, Florida
J. GRESHAM BARRETT, South Carolina
KATHERINE HARRIS, Florida
RICK RENZI, Arizona

                 Robert U. Foster, III, Staff Director
           Subcommittee on Housing and Community Opportunity

                     ROBERT W. NEY, Ohio, Chairman

MARK GREEN, Wisconsin, Vice          MAXINE WATERS, California
    Chairman                         NYDIA M. VELAZQUEZ, New York
DOUG BEREUTER, Nebraska              JULIA CARSON, Indiana
RICHARD H. BAKER, Louisiana          BARBARA LEE, California
PETER T. KING, New York              MICHAEL E. CAPUANO, Massachusetts
WALTER B. JONES, Jr., North          BERNARD SANDERS, Vermont
    Carolina                         MELVIN L. WATT, North Carolina
DOUG OSE, California                 WM. LACY CLAY, Missouri
PATRICK J. TOOMEY, Pennsylvania      STEPHEN F. LYNCH, Massachusetts
CHRISTOPHER SHAYS, Connecticut       BRAD MILLER, North Carolina
GARY G. MILLER, California           DAVID SCOTT, Georgia
MELISSA A. HART, Pennsylvania        ARTUR DAVIS, Alabama
PATRICK J. TIBERI, Ohio
KATHERINE HARRIS, Florida
RICK RENZI, Arizona


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearings held on:
    March 25, 2003...............................................     1
    April 28, 2003...............................................    35
Appendixes:
    March 25, 2003...............................................    59
    April 28, 2003...............................................   125

                               WITNESSES
                        Tuesday, March 25, 2003

Anthony, Rev. Wendell, Pastor, Fellowship Chapel, Detroit, 
  Michigan.......................................................    14
Caldwell, Rev. Kirbyjon, Pastor, Windsor Village United Methodist 
  Church, Houston, Texas.........................................    15
Daniels, Bishop Sedgwick, Pastor, Holy Redeemer Institutional 
  Church of God in Christ, Milwaukee, Wisconsin..................    18
Fairbanks, Dr. E. LeBron, President, Mount Vernon Nazarene 
  University, Mount Vernon, Ohio.................................    12
Feingold, Ellen, President, Jewish Community Housing for the 
  Elderly, also appearing on behalf of the National Association 
  of Homes and Services for the Aging and the Association of 
  Jewish Aging Services, Boston, Massachusetts...................    16
Kmiec, Douglas W., J.D., Dean, Catholic University of America 
  School of Law, Washington, DC..................................    21
Walker, Rev. J. Brent, Executive Director, Baptist Joint 
  Committee, Washington, DC......................................    19

                                APPENDIX

Prepared statements:
    Oxley, Hon. Michael G........................................    60
    Anthony, Rev. Wendell........................................    61
    Caldwell, Rev. Kirbyjon......................................    64
    Daniels, Bishop Sedgwick.....................................    68
    Kmiec, Douglas W.............................................    70
    Fairbanks, Dr. E. LeBron.....................................    75
    Feingold, Ellen..............................................    79
    Walker, Rev. J. Brent........................................    86

              Additional Material Submitted for the Record

Barney, Hon. Frank:
    Americans United for Separation of Church and State, prepared 
      statement..................................................    98
    ``Providing shelter'' The Observer, March 30, 2003...........   106
American Civil Liberties Union, prepared statement...............   109

                               WITNESSES
                         Monday, April 28, 2003

Weicher, John, Assistant Secretary, Housing, Federal Housing 
  Commissioner, U.S. Department of Housing and Urban Development, 
  accompanied by Ryan Streeter, Director, Center for Faith-Based 
  and Community Initiatives and Frank Jimenez, Chief of Staff....    39

                                APPENDIX

Prepared statements:
    Weicher, John................................................   126

              Additional Material Submitted for the Record

Frank, Hon. Barney:
    National Community Development Association, prepared 
      statement..................................................   131

 
                  STRENGTHENING AMERICA'S COMMUNITIES:
                     EXAMINING THE IMPACT OF FAITH
                       BASED HOUSING PARTNERSHIPS

                              ----------                              


                        Tuesday, March 25, 2003

             U.S. House of Representatives,
 Subcommittee on Housing and Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 3:04 p.m., in 
Room 2128, Rayburn House Office Building, Hon. Robert Ney 
[chairman of the subcommittee] presiding.
    Present: Representatives Ney, Green, Waters, Watt, Clay, 
Miller, Scott, Davis, and Frank (ex officio).
    Mr. Ney. [Presiding.] Good afternoon. The Subcommittee on 
Housing and Community Opportunity will come to order. I want to 
welcome members of the committee that are here--our Ranking 
Member Ms. Waters, Mr. Frank and Mr. Green.
    Today's hearing is about the Department of Housing and 
Urban Development's January 6, 2003 proposed regulation that 
intended to provide more opportunities for faith-based 
organizations to assist in meeting the needs of the poor and 
distressed neighborhoods. Today, there are hundreds of faith-
based organizations helping the homeless, providing decent 
affordable housing, and critical services for our nation's 
homeless seniors and disabled.
    As President Bush said when he announced his faith-based 
initiative, government has a solemn responsibility to help meet 
the needs of poor Americans and distressed neighborhoods, but 
it does not have a monopoly on compassion. In 1996, Congress 
enacted charitable choice legislation that sought to expand the 
involvement of religious organizations in social service 
programs. In January, 2001, President Bush issued two executive 
orders to create a White House Office of Faith-Based and 
Community Initiatives, and five centers for Faith-Based and 
Community Initiatives in five Federal agencies.
    Most recently, on December 12, 2002, the Administration 
announced several additional administrative measures to enhance 
its faith-based initiative administratively. In a limited way, 
faith-based organizations currently are allowed to participate 
in various Federal programs. However, the current regulations 
present a roadblock to full participation by faith-based 
organizations, hindering their ability to help those in need. 
The House-proposed rule would remove some of the barriers 
faith-based organizations now encounter when trying to 
participate in helping provide important programs. The new HUD 
regulations would modify requirements for eight specific 
programs: housing opportunities for people with AIDS, emergency 
shelters grants, shelter-plus care, the supportive housing 
program, HOPE III, HOME, and CDBG.
    I want to point out that Ohio has been among the states 
that have led the way in supporting charitable choice programs. 
In 2002, the Bliss Institute at the University of Akron and the 
Hudson Institute in Virginia jointly prepared a survey of 
government-funded faith-based programs in 15 states. The report 
notes that Ohio, California, Michigan and Texas lead the way in 
terms of dollars invested, while Ohio, Michigan and Wisconsin 
hold the most contracts.
    The committee has invited a broad cross-section of 
representatives from faith-based organizations who have 
experience providing social services. I think that everyone 
here shares the intent of HUD in crafting this regulation, 
which is ensuring the delivery of Federally funded services to 
very low and low-income people. While we all may agree on that 
goal, there are certainly different views on how to achieve it.
    Our witnesses today are here to share their experiences 
providing social services, as well as their views on whether or 
not the proposed rule will make the Federal funds more 
accessible to organizations such as theirs, and if not, what 
can be done to improve the proposal. I look forward to hearing 
from our witnesses. I want to take a moment to recognize that 
because of the diversity of faith-based organizations that 
flourish under our Constitution's protection, we were unable to 
accommodate every group that wanted to come and testify today.
    Without objection, members will be allowed to submit their 
written statements for the record. Hearing no objection, they 
will be submitted for the record.
    I yield to our ranking member, Ms. Waters, for her opening 
statement.
    Ms. Waters. Thank you very much, Chairman Ney.
    I would like to thank you and, of course, our own ranking 
member, Congressman Barney Frank, for agreeing to have this 
very special and important hearing. I would like to also thank 
all of our witnesses who have come today. I know that most of 
them are extremely busy and the fact that they have given up 
their time to be with us is certainly appreciated by me and 
other members of this committee.
    This hearing is extremely important for any number of 
reasons. The HUD, Department of Housing and Urban Development, 
is proposing new regulations to deal with the President's 
executive order relative to his faith-based initiative. The 
President has come up with a faith-based initiative because the 
President obviously believes that somehow our religious 
organizations are able to provide services to the communities 
that need it. What is interesting about the President's 
initiative is it does nothing to allow faith-based 
organizations to provide services to the community other than 
allow them to discriminate. Faith-based organizations can 
already, under 501(c)(3) operations where you separate the 
money that comes from the Federal government into the 501(c)(3) 
corporation, rather than mixing the money in the collection 
plate. They can already under 501(c)(3)s provide any services 
that the Federal government funds, that they allow to go to 
organizations that provide these kinds of services.
    Some of us are extremely concerned because the President's 
executive order absolutely violates Title VII and it flies in 
the face of President Johnson's executive order, which further 
supported Title VII in saying that if you receive Federal 
money, if you receive government money, you may not 
discriminate. This initiative by the President suggests that 
somehow religious organizations should be able to pick and 
choose who they hire. If they do not like somebody's skin 
color, if they do not like their gender, if they do not like 
the other organizations they are associated with, if they do 
not like the communities they live in--whatever--they would be 
allowed to undermine all of the civil rights work that many of 
our people have died for, to make sure that we do not have 
discrimination and the Federal government resources.
    Further, the President has put no new money out there for 
this initiative. The Federal government would open up even 
further, even though it can be done now, the opportunity for 
our faith-based organizations to compete for CDBG monies. That 
is, the money that goes from the Federal government to the 
cities, the Community Development Block Grant monies that area 
already being used by many of the community organizations 
throughout the country. Faith-based organizations would be in 
competition with these organizations, with the ability to 
discriminate. Faith-based organizations can already apply for 
CDBG monies. I know because I assist faith-based organizations 
in applying for money to do everything from build senior 
citizens' housing to have child daycare programs.
    And so this would simply do two things or three: number 
one, open up the ability to discriminate, which some of us are 
adamantly opposed to, we have worked too hard, we have fought 
too long to open up the ability to discriminate; and it would 
allow for a kind of proselytizing where you could have all 
kinds of religious symbols and relics et cetera, et cetera, and 
perhaps even discriminate against one religious organization 
against another.
    Unanimous consent for one additional minute.
    I noted in my research on this that I think it was Pat 
Robertson who said, he did not like the faith-based initiative 
because he did not think some religious organizations were 
Christian enough and they did not deserve to be funded. We have 
another ex-member of Congress, Mr. Bob Barr, who pointed out a 
religious organization that he did not like. He said they 
should not be allowed on military bases. So you open up the 
whole discussion of what is and what is not a good religious 
organization; what is an acceptable religious organization. Is 
it all right for the AMEs as opposed to the Pentecostals? Do 
they worship Christ the way we want them to? I do not think we 
want that kind of government involvement in religion.
    Finally, let me say this. There are some religious 
organizations now that are under investigation. Even with the 
walls that we have built up requiring that the 501(c)(3)s be 
used in order to operate programs, they have gotten into 
trouble because they mixed the money from the 501(c)(3) with 
the collection plate money. I daresay to you that many 
ministers who do not have the infrastructure, they do not have 
the grantsmanship capability, they do not have the assistance 
to go after this money and to implement these programs. They 
are opening themselves up for indictment by the very people who 
are telling you that they want you to get into this business in 
a certain kind of way. I would submit to you that the 
government needs to keep its hands out of the church, and the 
government needs to make sure that there is a wall that 
separates the 501(c)(3) from the collection plate. Every 
minister who cares about their ability to do what they want to 
do in practicing their religion should be opposed to this 
faith-based initiative.
    With that, I yield back the balance of my time, and I thank 
you, Mr. Chairman.
    Mr. Ney. The chair recognizes the gentleman from Wisconsin, 
Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I appreciate your 
leadership in holding this hearing. I have, as you might 
gather, a very different approach than the last speaker.
    I think we need to recognize that government and faith-
based organizations share many of the same objectives. At their 
best, all strive to help the less fortunate, both work to 
strengthen our communities, and both obviously try to make a 
better future for families. I have always supported the idea of 
returning to the charitable ideas that built America--local 
organizations, staffed by local people working on the ground to 
serve and solve local problems.
    We in government can do everything in our power to foster a 
healthy environment for community renewal. We can pass laws. We 
can implement all kinds of programs and services. We can and we 
should plow more funds into these areas. In the short term, our 
efforts will do some good, but there can be no real, long-
lasting community renewal unless we succeed in reviving the 
spirit of individuals, families and neighborhoods. That is 
something that government cannot do. That takes the hard work 
of individuals and local organizations like the faith-based 
groups that are represented here today.
    Each year in America, we spend billions of dollars 
providing social services. It just makes sense that we find the 
most effective way to deliver those services to the folks who 
really need them, whether that is through government or whether 
on some occasions that may be through private groups. 
Government should not and cannot retreat from its critical 
poverty relief mission, but at least in some cases, local 
faith-based organizations can do that mission more effectively 
than the Federal government, lift more lives and save more 
streets.
    At one time, faith-based organizations were at the core of 
efforts to improve our communities. They were very effective 
and have a proven record of success. Gradually, they have been 
pushed aside by big government, which has all too often proven 
to be a far less helpful alternative. The pendulum is just now 
beginning to swing back, as charitable choice is implemented. 
Under the leadership of then-Governor Tommy G. Thompson of 
Wisconsin, Wisconsin was one of the leaders in implementing 
charitable choice initiatives. HUD's proposal follows President 
Bush's executive order to give faith-based organizations more 
opportunities to provide these services for the sake of the 
people they help and for the future of our communities.
    I look forward to hearing from today's witnesses about 
their experiences in the community and with government, and how 
we can ensure their continued participation in providing 
services to those who are most in need.
    Finally, I am particularly honored to have Bishop Daniels 
of Milwaukee's Holy Redeemer Church of God in Christ here today 
to describe the profoundly beneficial impact his congregation 
and its affiliated entities have had on the largest city in my 
home State of Wisconsin. I have had the pleasure of meeting 
Bishop Daniels, most recently last July when President Bush 
visited the Holy Redeemer congregation to see first-hand what 
great work they are doing. Holy Redeemer serves the Milwaukee 
community through a network of social services, from housing to 
community development, foster care, shelters, and food 
pantries, to workforce readiness training, counseling, and even 
providing health services.
    Holy Redeemer has a history of serving the community with a 
level of dedication that I believe makes them truly unique. 
Bishop Daniels, it is a pleasure to have you before this 
subcommittee. I am proud of what you are doing and I look 
forward to your testimony.
    Mr. Chairman, I yield back.
    Mr. Ney. The chair recognizes the gentleman from 
Massachusetts for three minutes, Mr. Frank.
    Mr. Frank. Thank you, Mr. Chairman.
    First, I want to express my disappointment that we have no 
representative of HUD here today. We had assumed that the 
majority would have invited the Administration, as in my 
experience it always has on an oversight hearing over a 
particular Administration's program. In fact, the gentleman 
from California and I wrote a letter to the Secretary because 
we had assumed he had declined to send a representative. He 
told us he had not been invited. I should note that we have 
remedied that lack of, I think, courtesy to the department 
involved by exercising our right under rule 11 of the House. So 
all the members on the Democratic side have exercised our right 
to ask for secretarial hearings, which is a matter of right, 
and we will have a HUD representative. I think it is a grave 
error not to have HUD explain some of these issues. As I said, 
I am surprised that the majority assume, frankly, that it would 
be a good idea not to have HUD here.
    I am particularly concerned about a couple of aspects of 
this. One, this program is now going to be available under the 
Community Development Block Grant Program. That means every 
governing body of every community of 50,000 or more in America 
will be given the Federal funds to give to whatever religion 
they wish. I want to know how HUD is going to be supervising 
that; how they will supervise, for example, the rule that says 
you can build a house of worship with a mix of private and 
public funds, but you cannot worship in the public funds part. 
I am just wondering how we are prepared to police that, not 
that I think it is a good idea to get into a situation where 
you have to do that throughout the country, through CDBG.
    I also want to reinforce the point that was made so well by 
the ranking member, the gentlewoman from California. Beginning 
in 1954 with the case of Brown v. Board of Education, one of 
the great things about this Federal government has been its 
dedication to abolishing discrimination based on race, based on 
religion, based on gender, based on age, based on handicaps. 
There have been court opinions. There have been statutes. There 
have been regulations. There have been executive orders. The 
President's proposal appears to me to be a turning back of that 
clock. It sanctions discrimination. Indeed, we have previously 
held that while you might have a right to discriminate purely 
privately, the receipt of Federal funds gives you an even 
greater obligation not to discriminate. This proposal turns 
that on its head. People who receive Federal funds as we have 
interpreted this, and it has not been refuted, religious groups 
who receive Federal funds for secular purposes will be allowed 
to discriminate on religious grounds. That seems to me a 
terrible retreat from the principle of non-discrimination to 
which we have been committed.
    Indeed, the Federal funds, instead of giving you an added 
burden not to discriminate, become a license to discriminate. I 
know there are people who say, well, you should never burden 
people. I am reminded of the great words of the gentlewoman 
from California's distinguished predecessor, Mr. Gus Hawkins, 
who said when we reenacted a bill that the Supreme Court had 
narrowed, we said if you take Federal funds, you cannot 
discriminate, and people complained about interference. If you 
dip your hands in the Federal till, do not complain when a 
little democracy rubs off on your fingers.
    Now, what we are being told is you can dip your hands in 
the Federal till, and you come away immunized from the 
responsibility not to discriminate. I would like to ask 
particularly some of the representatives of the religious 
groups because--and I will finish in one minute, Mr. Chairman--
as the gentlewoman from California quite correctly pointed out, 
there is nothing in the law now properly interpreted which says 
that religious groups cannot get the money. The point is that 
they have to abide by the rules everybody else abides by. 
Apparently, there are some religious groups that have said, and 
I have heard this from members in this Congress, we cannot take 
the money to provide homeless shelters or drug treatment 
programs or soup kitchens or other important social purposes 
unless we can hire only our own people. The notion that there 
is something wrong about religious people joining in non-
religious activities with people of other religions is 
profoundly disturbing to me. I would think the world would have 
had too much of that, too much of the notion of religious 
separatism.
    So I really need to have answered for me what is it about 
people of other religions that makes people want to 
discriminate against them in hiring for purely secular 
purposes?
    With that, Mr. Chairman, I look forward to the hearing, and 
I would note again that we have delivered the letter, and I 
look forward to our having--and I am sorry, apparently there 
was a misunderstanding--but we will have a second day of 
hearings under the rule in which we will get a representative 
from HUD because there are some important questions to be 
answered.
    Mr. Ney. The gentleman from Georgia, Mr. Scott?
    Mr. Scott. Thank you very much, Chairman Ney and Ranking 
Member Waters and Ranking Member Frank. I want to thank you for 
holding this hearing today regarding HUD's proposed rule on 
faith-based organizations.
    I also want to thank the panel of witnesses today for 
coming before us and giving your important testimony. I look 
forward to hearing from faith-based organizations about their 
experiences in working with governmental agencies to address 
community needs. I believe that we should look to find creative 
ways to help more individuals in need in our community. And I 
believe that we have got to also be very concerned about 
keeping our constitutional protections against discrimination. 
Therein lies the rub. Where is the balance and how can we help 
smaller faith-based groups participate in HUD programs?
    I come from an area in this country that--a district that 
is urban, suburban, rural. I know, as many of my colleagues do, 
we run for office every other year, and we know the pivotal 
role that churches play in our communities. And certainly in 
many, many communities, but perhaps nowhere more significantly 
a role the church plays than in those African American 
communities, and many lower-income communities where the church 
is the central entity in that community, around which culture 
and educational, social development, community development 
takes place.
    So on one level the church is very attractive as a means, 
as a vehicle to do a tremendous amount of good. I have a number 
of ministers who have reached out to me and say, ``I want to 
participate in this faith-based initiative; my church can 
qualify here; I want to do some things; I want to help drug 
addiction; I want to improve the community; I want to build a 
community center; I want to do these things--can you help me 
get some of that faith-based initiatives grants and money, and 
how do we go about this?''
    But yet, the nagging question comes back to me of this 
balance. There have been some very disturbing questions raised 
by our ranking member, Ms. Maxine Waters, and certainly our 
ranking member, Mr. Frank of Massachusetts. We have got the 
find answers to those questions. It certainly disturbs me that 
HUD saw fit not to have a representative come here.
    Mr. Ney. The time of the gentleman has expired.
    Mr. Scott. May I just wrap up with one final point, please?
    Mr. Ney. The gentleman may.
    Mr. Scott. Thank you so much.
    I think governing those answers have got to be this big, 
big issue of how do we deal effectively with the separation of 
church and state. Having been one who has fought that battle to 
the Supreme Court, there are three legs upon which that 
separation rests, around which pivots, hopefully, this 
discussion, for it to be meaningful. One leg is that it must be 
religious-neutral. What we do must neither advance a religious 
cause, nor restrain it. The other is secular--that there be a 
secular purpose; and thirdly, that there is no religious 
entanglement.
    I am looking for answers to questions today so that I can 
take back to my constituency and make the right decision, and I 
look forward to receiving those answers.
    Thank you, Mr. Chairman, for expanding my time.
    Mr. Ney. The time of the gentleman has expired.
    The gentleman, Mr. Watt, from North Carolina?
    Mr. Watt. Thank you, Mr. Chairman.
    I appreciate the chairman convening this hearing. Like Mr. 
Frank, I am disappointed that we do not have a representative 
here from HUD to answer some of the difficult questions that 
are being raised. I want to thank all of these witnesses for 
being here, but I doubt that they are going to be able to 
address the concerns that we have about it, because I think 
uniformly they are interested in the same thing that we are 
interested in, which is how do you get services into 
communities and do it in an effective way that gets results.
    I heard my wife say a couple of days ago to somebody that 
she was giving up aggravation and stress for Lent. So I am 
trying to make sure that I do not get aggravated and stressed 
about this issue because the truth is, I know that religious 
institutions, churches have been providing services in my 
community and our communities for years and years and years 
before this President ever came along talking about some kind 
of faith-based initiative. The only difference I can discern is 
that as soon as he started talking about the faith-based 
initiative and showing up in some of the churches in our 
communities, a bunch of my ministers starting lining up at the 
door saying to me, ``I want some of that faith-based money.'' 
They were surprised when I told them that at the same time the 
President was announcing his faith-based initiative, he was 
actually cutting many of the programs that they had been 
accessing to provide housing to our communities and social 
services to our communities, and after school programs to our 
communities, and that there was no such thing as a faith-based 
fund. So I am not sure exactly what the fuss was all about.
    So you should know first of all that I have concerns about 
this because the total amount of funds that are available to do 
this stuff is being cut by the President, at the same time he 
is talking about having some faith-based initiative. He is 
going to need a bunch of help from churches and other 
institutions to get the same amount of services because you 
have less money out there to do it with.
    Second, I think this is going to open churches up.
    Mr. Ney. The time of the gentleman has expired. Would you 
like to wrap up?
    Mr. Watt. No, I think I will just--I am going to follow my 
wife's entreaty. I am going to give up this aggravation and 
stress for Lent. I mean, you know, we have made the point.
    Mr. Frank. Mr. Chairman, unanimous consent that as a great 
admirer of Mrs. Watt, could I ask that this part of the record 
be sent to her?
    Mr. Ney. Absolutely.
    [Laughter.]
    I would also note if we would like to give up aggravation 
and stress for Lent, we will recess for a month. That would 
probably help the country, too.
    Mr. Watt. I do not think they are going to let me do that, 
but if you want to make that motion, I will second it.
    [Laughter.]
    Mr. Ney. With that, the gentleman from Alabama, Mr. Davis?
    Mr. Davis. Thank you, Mr. Chairman.
    Let me thank all of you for coming today. At the risk of 
echoing some of what has been said, I want to pause for a 
minute on the point my friend from North Carolina just made. If 
you look at a lot of the programs that you all are trying to 
bring within the purview of faith-based organizations, they 
have an interesting characteristic in common. Almost every 
single one of them is under the President's budget axe right 
now. I am struck by that. I am struck by the Administration's 
withdrawing with one hand what it extends with the other hand. 
I would I suppose issue this invitation to all of you. The same 
passion and zeal that you bring to the cause of including 
faith-based organizations in various government programs, I 
hope that you will take that same passion down to 1600 
Pennsylvania Avenue or to whatever is the street of HUD, to let 
them know that these programs are vitally important regardless 
of whether faith-based organizations are allowed to participate 
or not.
    I compliment you for recognizing something that I do think 
is very important, that there is a moral dimension to the 
social commitment and the social fabric we have in this 
country. I happen to come from the third poorest congressional 
district in America, and I talk a great deal about religion and 
faith, but I do it in this sense. I do it in the sense that 
when Matthew says as you do unto the least of these, you do it 
unto me. That is the sense that ought to animate, frankly, a 
lot more of our political debate. To the extent that all of you 
recognize that, and I think that all of you do, I hope that is 
the message that you take down the street, that as you do unto 
the least of these, you do it unto me.
    I want to make a larger point. As someone who was born in 
Montgomery, Alabama, the home of the Montgomery bus boycott, 
which was a classic instance of faith firing a movement in this 
country, I have this old-fashioned belief, frankly, that 
churches do very well when they are independent, and that 
churches do very well when they do not have to come hat in hand 
to the Federal government seeking anything. When Martin Luther 
King was standing in the well of that church in Montgomery, 
Alabama in 1954, he could not pick up the phone and call Dwight 
Eisenhower's Administration. I happen to think that in some 
ways he was the better for that, and that his cause was the 
better for that.
    So as we talk about weakening even symbolically the wall 
between church and state, I think we ought to recognize this. 
Churches get their moral firepower in some ways from their 
sense of independence and from their sense that their cause 
does not require the Federal government's permission or the 
Federal government's largesse.
    I would make just one last point. I am deeply concerned 
that the whole notion of faith-based access has taken on an air 
of political patronage. I cannot tell you how many preachers in 
my community endorse certain politicians because they thought 
they would get the faith-based hook-up. There is something 
wrong with that. There is something wrong with political 
patronage having a religious cloak around it. And there is 
something wrong with men of faith and women of faith feeling 
that they have to meet some informal political litmus test. 
That is an inevitable cost of this erosion of the wall. It is 
an inevitable cost of what this Administration is doing when it 
comes to weakening that wall.
    I yield back. I thank you, Mr. Chairman, for extending my 
time.
    Mr. Ney. Mr. Miller of North Carolina.
    Mr. Miller. Thank you. I will not use my entire time.
    Both my maternal grandmother and my maternal grandfather 
had died by the time my mother was age four. She was raised in 
a Baptist orphanage in Thomasville, North Carolina. I 
understand very well the great works that we do when we act on 
faith, when we do truly love our neighbors as ourselves. But I 
do share many of the concerns that other members of the 
committee have raised about these proposed rules, that there is 
no reason that when religious groups are receiving Federal 
funds that they should not be held to the same rules as 
everyone else.
    Mr. Ney. I thank the gentleman, and I want to welcome all 
the witnesses to Washington, D.C., the U.S. Capital. Thank you 
in advance for your testimony that will be so important.
    I would like to start with the introduction of Dr. E. 
LeBron Fairbanks, President of Mount Vernon Nazarene 
University, Mount Vernon, Ohio, which happens to be in Knox 
County in the 18th district in Ohio, of which I am from. I was 
at the university just this past week and met a lot of good 
people up there. It is a wonderful university. They were 
preparing, in fact, the students to go do a lot of charitable 
work. Some headed out to New York and other parts of the United 
States. I just really want to give our warm welcome to Dr. 
Fairbanks today. And for the introduction of the next witness, 
I will yield to our ranking member, Ms. Waters.
    Ms. Waters. Thank you very much, Mr. Chairman. I would 
certainly like to introduce my good friend, Reverend Wendell 
Anthony, who is the pastor of Fellowship Chapel, Detroit, 
Michigan. But before I do that, I am not introducing, but I 
certainly want to welcome Reverend Kirbyjon Caldwell, pastor of 
the Windsor Village United Methodist Church in Houston, Texas. 
He is a friend. He is a friend of my husband's, and I am 
welcome in his church. While we may disagree philosophically 
and politically on some things, I want you to know you are 
welcome, and indeed I appreciate your friendship.
    The introduction that I am making today is of Reverend 
Wendell Anthony, an extraordinary minister. He is a native of 
St. Louis, Missouri. He was educated in the Detroit public 
school system from elementary through high school. He graduated 
from Wayne State University with a BA in political science, and 
Marygrove College with an MA in pastoral ministry. He also 
attended the University of Detroit for advanced study and Black 
theology. Reverend Anthony is a certified social worker with 
the state of Michigan.
    I would like to just share with you that he is the current 
President of the Detroit branch of the NAACP, the largest 
branch in the country, with a current membership of more than 
45,000 persons. He is a single father with two daughters, and 
he has received so many rewards and so much recognition for his 
work. I have been to his church on many occasions. He is the 
member of a lot of boards and councils inside the city of 
Detroit, including New Detroit, Incorporated; Michigan 
Coalition of Human Rights; and the Minority State Health Policy 
Advisory Council. I am also blessed to be invited each year to 
the NAACP banquet where he has about 10,000 paying individuals 
in one room, and four head tables of different colors around 
the auditorium. It is the most amazing thing that you would 
see.
    Lastly, let me just say this. He is responsible for a lot 
of ministries and programs, but I happened to be at his church 
when he started and organized the Rwanda relief effort, and 
with the Detroit branch of the NAACP, raised nearly $1 million 
in monies for transport of victuals, food, clothing, medical 
supplies and aid to Rwanda, Goma and Zaire. This an 
extraordinary man whose ministry has touched so many lives in 
so many ways. He is operating out of his church a number of 
programs that I saw listed here that I cannot put my finger on 
at this time, but I welcome him and I want you to know that we 
are particularly advantaged by his presence here today.
    Thank you very much for being with us, Dr. Wendell Anthony.
    Mr. Ney. I want to thank the gentlelady. Also, I was so 
caught up in the great job that Dr. Fairbanks does up there 
with the staff and the students, I did fail to mention that he 
also has been associated with Nazarene education programs in 
Switzerland, the Philippines and Ohio since 1978, and he serves 
as a Presidential mentor in the Executive Leadership Institute 
of the Council for Christian Colleges and Universities.
    I would like at this time to introduce Reverend Kirbyjon 
Caldwell, pastor of Windsor Village United Methodist Church. 
That is in Houston, Texas. He is the senior pastor of the 
Windsor Village United Methodist Church. Over the past 20 
years, Pastor Caldwell has grown the Windsor congregation from 
25 members to the largest United Methodist Church in the 
nation. Reverend Caldwell attributes the evolution of Windsor 
Village to his belief that the church must embrace theology, 
identify societal problems, and deliver solutions holistically. 
I want to welcome the witness.
    We will yield to the gentleman from Massachusetts to 
introduce the next witness.
    Mr. Frank. Thank you, Mr. Chairman.
    Our next witness is no stranger to these deliberations. Her 
name is Ellen Feingold. She is from Newton, Massachusetts and 
she is a very experienced individual, both in the field of 
civil rights and is a leader of a faith-based organization that 
has been very well-funded by the Federal government, although 
not as well-funded as she would like, but there is a lot of 
that going around. But Ms. Feingold, who has a very 
distinguished career, was during the Carter Administration 
director of civil rights in the Department of Transportation, 
so she has a particular expertise in the discrimination area. 
She was the co-chair of the commission we recently had 
appointed by a bipartisan congressional effort, on senior 
housing. And most relevantly today, she runs Jewish Community 
Housing for the Elderly. It has the word ``Jewish'' in it, and 
it has never been denied any money for that reason. It is an 
organization set up by the Jewish community in greater Boston 
to deal with housing problems. She administers a large number 
of units. It has continued to be called the Jewish Community 
Housing for the Elderly. It does not discriminate, but it's 
very much a faith-based organization. Even more, as she will 
note, she represents the association of housing groups, all of 
which are faith-based, and none of which have, she tells us, 
suffered any discrimination. So she brings a multiple of 
important perspectives to this hearing.
    Mr. Ney. I want to thank the gentleman, and yield to Mr. 
Green for the introduction of the next witness.
    Mr. Green. Thank you, Mr. Chairman.
    As I made reference to in my opening remarks, I am very 
proud to have here today Bishop Sedgwick Daniels. He is the 
pastor of the Holy Redeemer Church of God in Christ in 
Milwaukee, Wisconsin. Since 1986, Holy Redeemer has served the 
Milwaukee community not just as a place of worship, but as a 
true multi-faceted community resource. The services provided by 
Holy Redeemer include education, housing and social services. 
It is a true treasure in our community, and I welcome him here 
with the subcommittee.
    Mr. Ney. The next witness is the Reverend J. Brent Walker, 
who is the executive director of the Baptist Joint Committee in 
Washington, D.C. Reverend Walker served as the general counsel 
for the committee for 10 years before becoming its fifth 
executive director in more than 65 years. Reverend Walker is an 
ordained minister and an adjunct professor at Georgetown 
University Law Center. Welcome.
    The last witness is Douglas Kmiec. He is the dean of the 
school of law at Catholic University of America in Washington, 
D.C. Dean Kmiec also taught at Notre Dame and Pepperdine 
University. The dean served as principal deputy and assistant 
attorney general, office of legal counsel, in the Department of 
Justice from 1985 to 1989. He also received the distinguished 
service award from the Department of Housing and Urban 
Development in 1983.
    I want to welcome all the witnesses. Without objection, 
your written statements will be made part of the record. You 
will each be recognized for a five-minute summary of your 
testimony. I would also note and I would apologize, I do have a 
conflict and Mr. Green, the vice chairman, will be chairing the 
committee, but it is a very important step you are taking in 
being here today.
    Dr. Fairbanks?

   STATEMENT OF E. LEBRON FAIRBANKS, PRESIDENT, MOUNT VERNON 
            NAZARENE UNIVERSITY, MOUNT VERNON, OHIO

    Mr. Fairbanks. Mr. Chairman and committee members, 
greetings.
    Mount Vernon Nazarene University is located on a beautiful 
401-acre campus in Mount Vernon, Ohio, a city of 15,000 people 
located approximately 50 miles northeast of Columbus. The 
university was founded in 1968 on property purchased by 
community leaders and given to the new faith-based institution. 
The strong town-gown partnership is even more powerful and 
dynamic today. Enrollment this year in our numerous academic 
programs exceeds 2,300 students, a significant increase from 
the 191 students in the founding class. Consistent with our 
motto, ``to seek to learn is to seek to serve.'' Mount Vernon 
Nazarene University educates students to embrace their chosen 
vocations of business, education, ministry, social work or 
medicine with a servant's heart.
    As I understand the current HUD regulations, institutions 
like Mount Vernon Nazarene University are ineligible for any 
Federal housing assistance due to our faith-based nature. For 
the institution I serve, adequate quality housing on campus for 
low-income families, especially single parent and married 
students is crucial and currently unavailable. Since many of 
our students come from the Appalachian region of Ohio, West 
Virginia and Eastern Kentucky, and are first-generation college 
students, they simply cannot afford the typical rental 
facilities off-campus. I applaud and support the efforts of the 
Department of Housing and Urban Development to broaden the 
eligibility for Federally funded low-cost housing to include 
faith-based organizations and institutions. We only desire to 
be able to compete on equal footing for Federal assistance with 
all other eligible organizations.
    I want to respond to the three specific questions asked of 
this panel. Number one, the proposed regulations, if enacted, 
as I understand them, would provide significant assistance. I 
recommend a clear definition and statement be added for faith-
based higher education institutions such as Mount Vernon 
Nazarene University.
    Number two, the partnership between the Federal government 
and faith-based institutions could be substantially 
strengthened. In our situation, the lack of affordable housing 
leads some students to choose a college or university without 
the definitive and critical link between service and learning.
    Number three, approving the proposed HUD rule would enable 
faith-based higher education institutions to serve more low-
income individuals who yearn to become self-sufficient.
    Let me offer you an illustration of one woman's desire for 
self-sufficiency. Shannon, a Mount Vernon Nazarene University 
student, was single with a small child living in a previously 
funded, but subsequently sold HUD housing development. The 
neighborhood had deteriorated and become dangerous. Shannon 
wanted to move, but could not afford alternative housing. Each 
day after student teaching, she picked up her child from day 
care and literally prayed, ``please do not let anything happen 
to me or my baby; help me survive another night.'' Shannon's 
story could be repeated by other Mount Vernon Nazarene 
University students. I am pleased to report today that Shannon 
graduated with honors from our university and is a dedicated, 
influential teacher in the Mount Vernon school district, 
working with children of low-income families.
    I believe passionately in faith-based higher education 
institutions. In the past 35 years, the 11,000 alumni of the 
institution I serve have been challenged to make a difference 
in their world. Other faith-based institutions can echo our 
experience. We solicit your assistance in significantly 
increasing our potential for influence by approving and 
strengthening the proposed HUD regulatory changes for faith-
based organizations.
    Thank you.
    [The prepared statement of E. LeBron Fairbanks can be found 
on page 12 in the appendix.]
    Mr. Green. Thank you for your testimony.
    Reverend Anthony, welcome.

   STATEMENT OF REVEREND WENDELL ANTHONY, PASTOR, FELLOWSHIP 
                   CHAPEL, DETROIT, MICHIGAN

    Reverend Anthony. Thank you. To the committee and to those 
of my colleagues who have gathered here, let me thank you first 
of all for having me here to say a word about this most 
critical issue.
    First of all, let me just indicate at the outset that 
faith-based initiatives is the very initiative that causes us 
to be churches and institutions of faith. An initiative of 
faith requires a lot of work. We walk by faith, and not by 
sight, particularly when the budget is short all we have is 
faith, in many instances. So from the very outset, faith is the 
root which causes this tree to grow.
    I do want to just say, as we remember executive order 
11246, which prohibits the Federal government from 
discriminating against Federal employees, government 
contractors and subcontractors and grantees that have 
construction contracts on the basis of race, creed, religion, 
color, national origin or sex, has a long and distinguished 
history in preserving the equal opportunity of our nation. It 
even dates back to President Franklin Delano Roosevelt and his 
work with human rights activist A. Philip Randolph. As we look 
at the proposed rule change presented by HUD, it would 
unfortunately give religious organizations a special right to 
ignore laws and the Constitution of the United States which 
guarantees the freedom of religious expression, as well as 
denominational preference. It is my fear that the current 
language in the HUD proposed law suggests that religious 
institutions may retain their independence from Federal, state 
or local governments. It can be misinterpreted to suggest that 
religious institutions are exempt from the non-discrimination 
laws.
    It is also my concern, particularly coming from an area in 
our nation where we have a large community of Muslim Americans, 
many who practice Islam, who are not a part of the Christian 
tradition, that these laws and this new regulation can somehow 
be misconstrued to allow us to discriminate against those who 
do not share our particular theological view. Scriptures teach 
us that God is no respecter of any persons. I am also concerned 
that this rule would present a barrier to dollars that are 
already reduced in the Community Development Block Grant 
programs, particularly as it relates to the dissemination of 
monies that go for organizations in our communities.
    Further, I am concerned about the direct funding to 
religious institutions that proselytize and provide religious 
instruction at facilities where beneficiaries of such programs 
may redeem coupons, certificates or vouchers. The direct 
funding could lead to a mixture and a merger of funds from the 
regular offering plate to those that come in through Federal 
programs. Additionally, this carrot and stick approach--the 
carrot, of course, being, one, to gain political favors and 
support on the basis of financial contributions; the stick 
being in auditing or eliminating from financial services of a 
church or institution that in fact does not carry the political 
line.
    I would like to recommend to this committee, however, that 
we do consider the increase of funding to faith-based 
organizations that are small, that need resources, that need 
financial resources, that need available technical assistance. 
We created a CDC, community development corporation, to do 
housing, to do education. We are in the process of building a 
new church. We are in the process of doing single-family homes, 
senior homes, establishing a community center and a retail 
component. We created a community development corporation to do 
those things. While we relish money and need support, we do not 
relish the government coming into our business and calling us 
to task on issues that have nothing to do with what we are 
doing in terms of faith-based development.
    We also believe that there is a great need to provide 
funding and to restructure lending practices to small and low-
income families. They can have an appropriate credit review to 
review the process of scoring, to review the process of how one 
secures mortgages, because we run into that when we want to 
provide housing to people who have low income. They have a 
problem with getting the very housing that we want to provide 
to them. So we hope and we pray that the government would not 
interfere with the work of the church. The church has been 
doing it for many, many years after the government 
intervention. So often the government gives us a little to get 
in, but not enough to continue. We believe that if we fund the 
appropriate organizations, we can accomplish the strengthening 
of America and its families.
    [The prepared statement of Wendell Anthony can be found on 
page 14 in the appendix.]
    Mr. Green. [Presiding.] Thank you for your testimony.
    Reverend Caldwell, welcome.

   STATEMENT OF REVEREND KIRBYJON CALDWELL, PASTOR, WINDSOR 
                VILLAGE UNITED METHODIST CHURCH

    Reverend Caldwell. Thank you, Acting Chairman Green, and to 
Ranking Members Waters and Frank, and the balance of the 
members of the committee. Thank you so much for inviting each 
of us to be here.
    Congresswoman Waters mentioned the fact that I know her 
husband, and indeed her husband and I grew up in the same 
'hood, if you would, affectionately known as Fitzwater, Texas--
Houston, Texas--Fitzwater, Texas. And while growing up in 
Fitzwater, while I had no idea I would I would become a pastor, 
if I may say, the Lord placed on my spirit, yea, even at a 
young age, that more churches need to take the sanctuary to the 
streets, take the sanctuary to the streets. That has really 
been our approach at Windsor. We have over eight or nine 
different 501(c)(3)s, which are independently managed and run, 
independent from the church, one of which is a CDC. We develop 
houses. We develop programs for persons with AIDS, schools, et 
cetera, et cetera.
    To be very honest with you, we have been doing this for 
almost 17 years, and all of a sudden, abracadabra, it becomes 
faith-based, complete with all the political hoopla associated 
with it. I think it is unfortunate because it seems as if we 
are getting substance and style confused. I am happy to hear 
all the comments from the members of the committee, because it 
has really enlightened me. I am not a politician. I am not a 
lawyer. I am just a little pastor trying to help the people. 
But to hear the program referred to as almost mandatory, as if 
you have to get involved, I think is a little bit misleading. 
If you do not like the policy of the faith-based deal, then do 
not apply. Some folk have mentioned it is very Christian, and I 
really abhor that statement that was made by the gentleman you 
mentioned, Congresswoman. That was very unfortunate because 
based on my interpretation, the Administration is very clear 
that this is truly an ecumenical initiative, and in fact it is 
even for folk with no faith. You do not have to believe in 
anything or anybody, and you can still apply for funds.
    I think that gets to the very core issue, which is, as I 
understand it, the Administration in general, HUD in particular 
wants to level the playing field so that whosoever will, if you 
could, could and would come. It is HUD's desire to (A), remove 
whatever regulatory or administrative barriers that may be 
present; and (B), enhance or increase the capacity for building 
more programs for more people on a more equitable basis.
    I could go on and on and on, but I will close. I am not 
real sure how much time I have left, but anything we can do to 
improve the community and increase social entrepreneurship in 
helping the least, the last and the lost, without crossing the 
lines of the Constitution, I think we should get after it. 
Again, I am not a legislator. I leave it up to this sage and 
insight wisdom of those of you who are seated here how to work 
that out. But please, do not deny those who are trying to make 
a difference. Contrary to some popular opinion, Windsor and the 
501(c)(3)s have not received a lot of money, in fact any money 
from the Administration, but we want to make certain--that is 
not to say we will not try to get some. But it is to say that I 
think there are more smaller entities in America that could 
really benefit, not just from the financial support, but from 
the technical support which the faith-based initiative offers, 
as I understand it, is ready, able and willing to lend.
    Thank you very much.
    [The prepared statement of Kirbyjon Caldwell can be found 
on page 15 in the appendix.]
    Mr. Green. Thank you. You may not have the wisdom of a 
legislator, but I know we do not have your wisdom, and that is 
why we have invited you here. We appreciate your testimony.
    Ms. Feingold, welcome.

   STATEMENT OF ELLEN FEINGOLD, PRESIDENT, JEWISH COMMUNITY 
                    HOUSING FOR THE ELDERLY

    Ms. Feingold. Thank you so much for inviting me. I am so 
pleased to be here.
    Jewish Community Housing for The Elderly has facilities 
that are in both Congressman Frank's and Congressman Capuano's 
district. I am sorry Congressman Capuano is not here to hear 
us. We have found no obstacles for a faith-based, a faith-
committed organization in accessing Federal funds. We own and 
manage over 1,000 units of housing for low-income seniors. 
Their average age is over 80. Their average income is under 
$10,000. Over half of them are eligible for nursing homes, but 
they can stay in our buildings because of the services we are 
able to access for them. We are proud of our record of 
nondiscrimination, both in employment and also in the residents 
that come and live in our buildings.
    In addition to representing my own organization, I am also 
representing the American Association of Homes and Services for 
the Aging, with over 5,600 nonprofit organizations of whom 75 
percent are faith-based. I am also representing the Association 
of Jewish Aging Services, obviously all of whose organizations 
are faith-based. We are talking about well over one million 
seniors living in the housing that these faith-based 
organizations are now providing with HUD money. It does not 
sound like a problem that needs solving. No member organization 
of either of these associations has ever complained of 
obstacles on the basis of their being faith-based 
organizations. We do bring an extra measure of commitment, 
quality and value to what we do, but we do it on a nonsectarian 
basis. Everybody is welcome.
    When I was co-chair of the Commission on Affordable Housing 
and Health Care Facility Needs of Seniors in the 21st Century, 
the Seniors Commission heard testimony all over the country. We 
heard people praising the faith-based organizations that had 
created housing, but what we heard much more than that was, we 
need more. Where is the money to build more? The organizations 
are there. They are competent. They are committed. They are 
ready. There is no money to do it with. That is what we need to 
be focusing on.
    Ultimately, the commission put out 50 recommendations that 
might make it better, easier to create more senior housing. Not 
one of them deals with the issue of obstacles to faith-based 
organizations because it was never presented to us as a problem 
and none of the members of the commission several of whom are 
in fact running faith-based organizations, saw it as a problem. 
We strongly oppose any actions that would lower the standards 
in any way for the facilities that are built with Federal 
funds. We oppose the use of funds to create spaces that are 
sectarian. We are well able to function within our faith in the 
spaces that come under our nonsectarian guidelines.
    I brought with me something that I want to give to you. At 
Jewish Community Housing for the Elderly, we have a community 
Seder. Passover is coming. This is the Haggadah we use. For 
those of you who have never been to a seder, it is a service 
that recounts the Exodus. This Haggadah is in four languages--
English, Hebrew, Russian and Chinese--because the participants 
in our seders, all of whom are voluntary, come in all colors, 
shapes, denominations and languages. The seder is obviously 
entirely funded with charitable funds, not with government 
funds. The books are produced with charitable funds, not 
government funds. It is one of the high points of the year. So 
is Chinese New Year, which our Chinese residents celebrate as a 
religious holiday. That is funded by private funds. We have no 
obstacles to respecting and celebrating the diversity of 
religions within our communities.
    The stark issue, again, is the lack of funds. We would 
build more in a heartbeat if we had more money. The 202 program 
is, I believe Secretary Martinez alone has----
    Mr. Green. Ms. Feingold, if you could wrap your testimony 
up.
    Ms. Feingold. I apologize. I just want to say that it is 
your constituents who call us and call you looking for more 
housing. We do not believe there is an obstacle. We do not 
believe this rule will make the slightest bit of difference. 
What will make a difference is more funding.
    Thank you very much.
    [The prepared statement of Ellen Feingold can be found on 
page 16 in the appendix.]
    Mr. Frank. Mr. Chairman, just briefly, I would just like to 
say a the end of this, it would now be appropriate if we asked 
Ms. Feingold only four questions.
    Mr. Green. Okay.
    [Laughter.]
    Ms. Feingold. That sounds like the seder.
    Mr. Green. Bishop Daniels, welcome. Good to see you again.

  STATEMENT OF BISHOP SEDGWICK DANIELS, PASTOR, HOLY REDEEMER 
  INSTITUTIONAL CHURCH OF GOD IN CHRIST, MILWAUKEE, WISCONSIN

    Bishop Daniels. Thank you. Let me also say that I spoke 
with Bishop Patterson this morning, the presiding bishop of our 
church, who supports the comments that I shall make at this 
time.
    Thank you, Mr. Acting Chairman, and distinguished members 
of this august body. I am pleased to be here today to testify 
to you with respect to the efforts of Holy Redeemer Church of 
God in Christ and its affiliated entities and connection with 
the development of efforts to improve the lives of citizens in 
our city, Milwaukee, Wisconsin.
    Mr. Chairman, perhaps a little background may be helpful to 
you. We founded Holy Redeemer ministry 17 years ago with eight 
persons, and have grown this ministry to over 5,000 persons, 
representing people of every background and skill. Our 
organization has more than 39 affiliated entities which are 
involved in self-improvement activities such as the creation of 
a 140,000 square foot youth center in a neighborhood densely 
populated by low-income students; development of multiple 
public-private operations; school initiatives which have 
resulted in improvement of education for some of the most 
economically distressed youngsters in Milwaukee. We have now 
educated and are now educating more than 750 students daily, 
including students at risk and other students in our schools.
    The development of a health clinic has been our focus on 
bringing the marvels of medicine directly to the community that 
we serve through a clinic located on our campus, which is 
affiliated with a faith-based organization called Covenant 
Health Care--a large health care provider in Wisconsin. Our 
campus is a redevelopment of a 10-acre site which was 
previously distressed and in fact was vacant. We have turned 
this site into a vibrant complex and campus serving literally 
thousands of people each day who receive a variety of 
services--meals, job training, health education and care, top-
flight elementary and adult education.
    Our mission, then, is to have a 24/7 outreach to this 
community. The demographic data for this community reflects 
that not only are we providing services, but this has resulted 
in the employment of hundreds of people. The success stories 
are indeed marvelous. One of the best examples is one of our 
school administrators, who through many efforts used welfare 
outreach services to college, educates herself, ultimately 
becoming a college graduate. And after several years of working 
as a teacher, she became one of our school administrators on 
our campus. In fact, President George W. Bush visited our 
campus last year to get a first-hand view of the remarkable 
effects we are having on people and changing lives.
    The examples go on and on with respect to how we have 
changed the lives of people. We have also been critically 
involved in the housing initiative in our community. When we 
consciously moved our campus to the economically depressed 
central city area, many were surprised that we did so and 
thought that we might move to a tranquil suburban environment. 
But we intentionally did not do so because we really knew where 
the needs were. One of the things we found was that many people 
had housing needs--elderly people, people who were in 
transition, people who were searching for the American 
homeownership dream. We therefore, with the cooperation of the 
city of Milwaukee and through the use of Federal tax credits, 
developed a premier low-rise elderly housing project, which has 
received many recognitions, including a special award from the 
Federal Home Loan Bank Board. The facility is over-subscribed 
and there is a tremendous demand for us to provide additional 
facilities for seniors.
    We also obtained and rehabilitated many homes in the area 
where we are, for transitional needs of our people. Many of 
these people have used this program as a springboard to putting 
their lives back together, and they have moved on to very 
productive citizenship. In connection with the local bank, we 
have also instituted----
    Mr. Green. Mr. Daniels, we need you to wrap up, please.
    Bishop Daniels. Very good. That is a good thing to tell a 
minister.
    [Laughter.]
    ----our homeownership seminar and progressive program.
    In summary, I think that it is important to know that 
people that have visited our campus have noted that we have 
been able to create an improved housing stock in our 
neighborhood, created an environment with literally hundreds of 
people from our neighborhood have meaningful life-supporting 
jobs. This is the commission to which we are called, and we 
hope that you through your legislative powers will recognize 
that such faith-based initiatives such as ours are vital in 
many communities throughout the country.
    Thank you.
    [The prepared statement of Sedgwick Daniels can be found on 
page 18 in the appendix.]
    Mr. Green. Thank you very much.
    Mr. Walker, welcome.

  STATEMENT OF REVEREND J. BRENT WALKER, EXECUTIVE DIRECTOR, 
           BAPTIST JOINT COMMITTEE, WASHINGTON, D.C.

    Reverend Walker. Thank you, Mr. Chairman, and members of 
the subcommittee for this opportunity to speak to you about a 
matter as important as religious liberty and the separation of 
church and state.
    Although as the chairman mentioned, I serve as an adjunct 
professor at Georgetown University Law Center, I speak today 
only on behalf of the Baptist Joint Committee on Public 
Affairs. The Baptist Joint Committee has always advocated a 
well-balanced and sensibly centrist approach to church-state 
issues. We take seriously both religion clauses in the First 
Amendment--no establishment and free exercise--as essential 
guarantees for our God-given religious liberty.
    We appreciate the good works of religiously affiliated 
nonprofits, in careful cooperation with government entities 
such as HUD. But we believe that religion will be harmed, not 
helped, by efforts of government to fund pervasively religious 
enterprises or otherwise to advance religion. This is precisely 
what the Administration is trying to do through its proposed 
regulations. Government-funded religion is the wrong way to do 
right. Government's attempts to level the playing field, as the 
metaphor goes, usually results in religion getting leveled by 
government. Religion is different and it should be treated 
differently. It is treated differently in the First Amendment--
sometimes deserving special accommodation under the free 
exercise clause; sometimes special or unique constraints under 
the establishment clause.
    We are particularly concerned with three aspects of this 
proposal. One, the proposed rules open the door for government-
funded religion. It is a settled constitutional principle that 
government may not fund pervasively sectarian or pervasively 
religious organizations and enterprises. The proposed rules 
ignore the pervasively sectarian doctrine. And even where an 
organization is not pervasively religious, but only religiously 
affiliated, it cannot use government funds to finance 
specifically religious activities. The proposed rules try to 
answer this constitutional requirement by prohibiting the funds 
from being used to support, quote, inherently religious 
activities, unquote. But the problem with this nebulous, novel 
and ill-defined concept is that the establishment clause 
prohibits activities which, while perhaps not inherently 
religious, may be administered in various religious ways and 
religious context in training seminars and counseling services 
and other activities.
    Number two, the proposed rules allow for religious 
structures to be built with government funds that violate the 
establishment clause, as Congressman Frank mentioned. The rules 
specifically permit structures to be used for both religious 
and secular purposes, as long as the funding is proportionately 
reduced to equal the percentage of religious use. This approach 
creates the potential for excessive entanglement between church 
and state. It raises the specter of accounting problems and 
logistical difficulties and burdensome auditing and 
recordkeeping, and would most certainly create the need for 
perpetual monitoring. The rule change on government funding of 
religious structures opens a can of constitutional and 
administrative worms that will be inimical to the autonomy of 
religious organizations, and promote the very excessive 
entanglement which the First Amendment was designed to 
prohibit.
    Third, the proposed rules permit discrimination on the 
basis of religion in hiring in government-funded programs. Now, 
we support title VII's exemption for churches, allowing them to 
discriminate on the basis of religion in their employment 
practices. But the proposed rules permit discrimination even in 
programs substantially funded by government. While allowing 
religious organizations to discriminate in the private sector 
is a welcomed accommodation of religion, to subsidize religious 
discrimination is arguably unconstitutional and in any case an 
unconscionable advancement of religion. How odd for the 
Administration to use the language of non-discrimination to 
promote a policy that leads to government-funded 
discrimination.
    In summary then, government should not fund organizations 
that are pervasively religious. Government may fund religiously 
affiliated ones, organizations as you have heard that serve out 
of religious motivation to be sure, but not in a way that 
integrates religion into its programs, involves religious 
worship or instruction, education and proselytizing, or 
discriminates on the basis of religion in hiring or serving 
beneficiaries. Any religious programming by these groups should 
be separately offered and privately funded and voluntarily 
attended. To the degree the existing HUD regulations serve 
these ends, they should be retained. But to the extent the 
proposed HUD regulations vary from these principles, they 
should be rejected.
    Thank you very much.
    [The prepared statement of J. Brent Walker can be found on 
page 19 in the appendix.]
    Mr. Green. Mr. Walker, thank you. Thanks so much.
    Mr. Kmiec, welcome.

 STATEMENT OF DOUGLAS W. KMIEC, J.D. DEAN, CATHOLIC UNIVERSITY 
           OF AMERICA SCHOOL OF LAW, WASHINGTON, D.C.

    Mr. Kmiec. Thank you, Mr. Chairman.
    I am pleased to respond to the subcommittee's invitation. I 
have spent most of my life teaching or writing or thinking 
about constitutional questions. It was my privilege to serve as 
President Reagan's head of the office of legal counsel in the 
Department of Justice and to spend part of the first Bush 
Administration there as well. So I will address myself mostly, 
if not entirely, to those constitutional questions suggested by 
other witnesses and that may be raised by the members.
    Let me begin with my conclusion, and that is that these 
regulations do not transgress the guarantee of freedom of 
religion found in the First Amendment of the United States 
Constitution. Instead, they do three things which are perfectly 
consistent with constitutional case law, as well as text, and 
that is first, they establish the principle of 
nondiscrimination. Government funds shall neither be 
distributed giving favoritism to nor discriminated against 
religious organizations. Significantly, this applies to both 
the Federal government and state and local governments that are 
often in partnership with the Department of Housing and Urban 
Development administering funds. Both are enjoined to treat 
religious organizations under the same eligibility 
requirements, and in my judgment not only is this fully 
constitutional, this is a principle that is unassailable and 
long overdue.
    Second, it explicitly provides that funds supplied directly 
to a faith-based organization may not be used to support 
inherently religious activities such as worship, religious 
instruction and proselytization. Importantly, from the 
standpoint of religious freedom and nondiscrimination, the 
regulations make clear that even though government funds cannot 
be used for these purposes, nothing precludes a faith-based 
organization from continuing inherently religious activities 
from nongovernmental sources. Analogously, the regulations 
ensure that faith-based organizations can retain their 
independence, something which I have heard other members of the 
panel speak eloquently to, allowing for example, the continued 
use of a religious organizational name, as well as the 
inclusion of religion in the organization's definition, 
practice and expression.
    Similarly, if HUD funds are provided for acquisition, 
construction or rehabilitation, and these are provided for 
under the regulations for structures that are either wholly 
secularly or of mixed use, that government funding cannot 
exceed the pro-rata secular portion. That aspect of the 
regulation merits constitutional inquiry, and I know in the 
question and answer period we may spend some time with it. I 
think it deserves a close look.
    Thirdly, no current or prospective beneficiary of a 
government-funded service shall be discriminated against on the 
basis of religion or religious belief. No genuine faith-based 
organization would ever think about discriminating against 
someone who is a beneficiary on the basis of their religious 
belief. The men and women who are at this table are at this 
table because they believe they were called by a higher power 
to serve their fellow man in specific and very necessary ways. 
They are not in the practice of turning people away, and the 
HUD regulations establish that and affirm that proposition.
    In summary, Mr. Chairman, the HUD regulations eliminate a 
variety of constitutionally unwarranted regulations of the 
past. In the past, regulations have categorically excluded 
religious organizations with the demeaning terminology 
``pervasively sectarian organization.'' The Supreme Court of 
the United States in its most recent holdings has made clear 
that the terminology ``pervasively religious or sectarian 
organization'' is a demeaning one because it comes out of a 
19th century hatred for religious believers and immigrants to 
our country. These regulations, importantly, separate us and 
put distance between that odious practice and the present day.
    Thank you, Mr. Chairman. I would be happy to answer any 
questions.
    [The prepared statement of Douglas W. Kmiec can be found on 
page 21 in the appendix]
    Mr. Green. Thank you, Mr. Kmiec, for your testimony. I 
appreciate it very much.
    Questions--Mr. Kmiec, let me begin with you. The standards 
that are in the proposed rule with respect to opening up 
service provision to organizations which may be faith-based, 
how does that compare to the standards that are in the existing 
welfare reform law passed by the Clinton Administration? Do you 
know? Can you answer that?
    Mr. Kmiec. Well, I am not prepared to look at the specific 
Clinton proposals, but the one thing that is true is that what 
HUD has done here is follow a template that Congress has 
approved before several times in the context of charitable 
choice legislation. So to the extent that charitable choice 
worked its way into those specific Clinton Administration 
regulations, I think these are quite comparable.
    Mr. Green. Thank you. I would like to go back--Reverend 
Caldwell, we have had testimony from some of the other 
witnesses that there are no obstacles or hindrances to faith-
based organizations or community organizations accessing 
Federal funds and providing services. You started off with some 
smaller organizations which have provided services. Have you 
encountered obstacles? Have you seen challenges in working with 
the Federal government?
    Reverend Caldwell. No, sir. We have not encountered any 
obstacles because we have not applied for any funds. But it has 
been the experience of some of my colleagues that they have 
encountered obstacles, and that is one reason I am here today.
    Mr. Green. Let me ask you this, then, why is it that you 
have not applied?
    Reverend Caldwell. Well, my shortest and most intelligent 
answer is that in the past we have not wanted to get involved 
in the red tape, to be honest with you. We are not afraid or 
ashamed to be audited. I think any church worth its salt ought 
to be open to Mrs. Jones and Mr. Booker and the U.S. 
government. But the impression is that it has been 
multilayered, and we have just kind of gone it alone--period, 
new paragraph. We intend to apply for funds regardless of what 
happens to this particular legislation.
    Excuse me, I erred. We did receive a $500,000 grant from 
OCS during the Clinton Administration to help build what is 
called the Power Center, where we took an old dilapidated K-
Mart building and gutted it. It now provides employment for 
over 247 persons, has a $14.5 million annual economic impact 
cash flow on the community. It is an amazing example of how 
private enterprises and nonprofit entities can and I think must 
come together to make an indelibly divine difference in the 
community. But that was an application filed by our Pyramid 
CDC, not by the church.
    Mr. Green. When you took a look at, or when you weighed the 
costs and the benefits of making application for Federal funds, 
and again largely have chosen not to do so, was one of your 
fears that in order to meet all the requirements and sort 
through the red tape, that you would have to hire additional 
people?
    Reverend Caldwell. That is absolutely correct. In addition 
to that, to be very honest with you, I had heard such 
nightmarish stories about the process, we simply chose not to 
get involved. Again, you should not go based on hearsay. But we 
have so many things going on. We have nine or ten different 
501(c)(3)s, 14,000-member church, half of them think they are 
the pastor on any given good day, so we have a lot of dynamics 
happening, and the last thing we needed to do was to allocate 
an inordinate percentage of our intellectual and financial 
resources to go after a grant which we may not even get.
    Mr. Green. Bishop Daniels, could you relate some of Holy 
Redeemer's experience in working with the Federal government in 
terms of Federal funds? Have you seen red tape and obstacles?
    Bishop Daniels. Oh, definitely. For instance, there are 
some hurdles that we are overcoming even as I speak now. There 
was an abandoned building next door where there was flight from 
a manufacturing company. We wanted to turn that into, as 
opposed to it becoming a drug house and loitering et cetera, 
into a youth center. We were clearly told that if we were to 
receive any assistance through funds, whether it is city, that 
would be processed through CDBG and the State of Wisconsin and 
the Federal government, that it could not and would not by any 
stretch of the imagination be given to the church, and it could 
not be given. There were a number of hurdles that we had to 
overcome as a result of that. It was clear as we began to work 
through ultimately the title of that property had to be a 
separate organization altogether, to work to save the kids. 
What people do not understand is at 3 o'clock, all of those 
kids become our kids. It does not matter where they attend or 
what they do, we were just trying to get them off the streets 
and from killing one another, and getting them into 
constructive programs.
    Mr. Green. Thank you very much.
    The gentlelady from California is recognized.
    Ms. Waters. Yes, first of all let me thank all of our 
ministers and heads of organizations who are here today, and 
just really commend you on the programs that you already have 
and the work that you have already done, long before you heard 
about anything called a faith-based initiative. Let me just say 
to Reverend Kirbyjon Caldwell, 17 years, and how many 
nonprofits do you have over there?
    Reverend Caldwell. We have nine nonprofits.
    Ms. Waters. Nine nonprofits, 17 years, a CDC, and you did 
it without the government.
    Reverend Caldwell. So far.
    Ms. Waters. So far, you have done it without the 
government.
    Reverend Caldwell. Yes, ma'am.
    Ms. Waters. There were no obstacles to you setting up a 
501(c)(3).
    Reverend Caldwell. That is correct.
    Ms. Waters. You can have a nonprofit corporation.
    Reverend Caldwell. That is correct.
    Ms. Waters. There is no obstacle to you applying for CDBG 
monies in the city of Houston.
    Reverend Caldwell. No obstacles locally?
    Ms. Waters. Yes.
    Reverend Caldwell. Not to my knowledge.
    Ms. Waters. That is Federal money that we send down to the 
cities for them to give out to the communities to do all these 
kinds of programs--senior citizens, child care, et cetera. 
There are no obstacles to you or any other religious 
organization in applying for those funds under your 501(c)(3). 
Is that correct?
    Reverend Caldwell. None to us. I cannot speak to the other 
organizations.
    Ms. Waters. Well, here is the point that I am making.
    Reverend Caldwell. Yes, ma'am.
    Ms. Waters. I think it was Mr. Kmiec who said that it is 
important to have this faith-based initiative to get rid of and 
establish the principle of nondiscrimination for religion. 
Title VII does that. The Constitution does that. You are not 
discriminated in any way, and you are protected by Title VII 
and government law. What I think has been the misunderstanding 
about this faith-based initiative is this. Somebody is telling 
ministers that somehow you should be able to administer these 
programs without having to set up a 501(c)(3) or a separate 
organization; that you can commingle it with the church; and 
that you can use some of the laws that are on the books for 
religious organizations that allow you to hire within the 
religion in the same way when you use Federal money. That is 
where the rub, the disagreement comes in.
    Much of what is being described is red tape that has 
nothing to do with discrimination against a religious 
organization. It does not matter. When you get money from the 
Federal government, you are going to go through some red tape. 
Nobody is going to reach in the government's pocket and hand 
anybody any money. You are going to go through some red tape. 
You are going to be scrutinized, and John Ashcroft is going to 
indict you if you spend the money outside of the regulations 
and the laws. And that we have to make very clear to everybody, 
that there will be no way even under faith-based initiative 
that you will be able not to be able to account in ways that we 
all would want to account. So we need to be clear about that. 
There is no discrimination now against religious organizations 
in competing for money.
    The other thing is, does anyone here believe that there is 
a new pot of money called faith-based money? If so, raise your 
hand. Okay, we are clear about that. There is no new money 
called faith-based money. Technical assistance that was 
mentioned by Reverend Anthony, we can all agree on. We are not 
against religious organizations getting money. Again, we assist 
and we help people to set up CDCs and EDCs and even help to set 
up nonprofit organizations in order to do that. Do we all agree 
that a lot of churches could use some technical assistance in 
order to set up a 501(c)(3) or EDC or CDC in order to provide 
services, Reverend Anthony?
    Reverend Anthony. Yes, congresswoman, we do. I come from 
Detroit, and what we are doing--I am affiliated with an 
organization called New Detroit, Incorporated. What is part of 
our charge is to assist groups to do just that; to develop 
501(c)(3)s. I also come from an area where the faith-based 
initiative has been used by some in administrative offices as a 
carrot and a stick approach. By that, I mean if I look at the 
history of those in Michigan who have benefited from the 
state's version of faith-based initiative, it has been those 
who are particularly friendly to the past Administration. The 
past Administration that was in office for 12 years used that 
as a measure by which to access the African American community. 
I am very clear about that. We are very clear about that.
    I do not think you will find any of us who oppose churches 
working with the government in partnership to do community 
development. We have always done that. The problem is I come 
from a state that has a $1.8 billion deficit, and within that 
confine we are looking now at churches to make up some of the 
areas where the government may not be able to provide services. 
Where are we going to get the money to do that? From our 
offerings, from our coffers? The problem that we run into is 
that we can do CDCs. Reverend Caldwell can do CDCs, but there 
are many other smaller churches and organizations that cannot. 
They need the assistance. Monies need to be provided through 
agencies that can assist them in terms of developing their 
programs and professional staff development.
    We get that all the time. There is an old African proverb 
that says even the smallest deed is better than the greatest 
intention. I think we may have a good intention, but what we 
need is some small deeds, those deeds being money and capital 
and sense.
    The other concern that I have is I look at what we see 
coming from many religious leaders today who are in various 
denominations. As we look at what is happening in the world, I 
think that it sets a precedent for some individuals to mis-use 
that initiative. I do no think that the vast majority of folk 
may be subject to that, but I do think that it opens up the 
door for people to discriminate----
    Mr. Green. I must ask you to wrap up.
    Reverend Anthony. ----particularly as it relates to the 
area where I come from, which has a high degree of Muslim 
Americans who are not antithetical to America, but I know if 
certain folk get monies, they will not be able to participate 
in those programs.
    Mr. Green. Thank you. The gentlelady's time has expired. 
The gentleman from Massachusetts, Mr. Frank.
    Mr. Frank. Mr. Kmiec, let me ask--you did not touch on the 
question of employment discrimination. As you read this, would 
the recipients be allowed to take the money for the secular 
purpose and agree to hire only members of their own religion?
    Mr. Kmiec. I agree with Congresswoman Waters that it is a 
fundamental guarantee of religious organizations in our society 
to be able to maintain their character by the people they hire.
    Mr. Frank. So the answer is yes.
    Mr. Kmiec. That is correct.
    Mr. Frank. Now, so you believe that as this is constructed, 
you said you agree with Congresswoman Walters. Well, a 
Congresswoman named ``Walters'' might have said that. I do not 
think Ms. Waters said it. The question is----
    Mr. Kmiec. I believe Congresswoman Waters said quite 
eloquently----
    Mr. Frank. I am sorry. I only have five minutes, Mr. Kmiec. 
Excuse Mr. Kmiec, I only have five minutes. I have to ask you 
this. And I want to ask the other members who are in favor of 
this, I am troubled, I must say, by the notion that it somehow 
would erode or corrode or detract from a religious organization 
engaged in secular good works, because that is obviously what 
we are talking about here--that religious organizations engaged 
in good works that were funded with Federal money for secular 
purposes--I am troubled by the notion that it is wrong to ask 
them to associate with people of other religions. That just 
seems to me to be such a troubling notion. Let me ask, 
beginning with Mr. Fairbanks. Why would it be a problem if you 
were to do something purely secular, to hire people of other 
religions?
    Mr. Fairbanks. Let me say that we are involved with our 
students in a variety of projects, and they are for sure not 
associated with religious groups.
    Mr. Frank. I have a specific question. Why would it be a 
distraction to you--how would it take away from your mission if 
you got money to provide drug treatment or help for the 
homeless and you had to hire people of other religions? How 
would that hurt?
    Mr. Fairbanks. If a person would affirm their belief in 
what we are intending to do with our mission, our vision, and 
embrace those, then we could----
    Mr. Frank. What do you mean by--you mean your general 
religious mission or your specific one for which you got the 
money? Let me pass on to Reverend Caldwell. Reverend Caldwell, 
do you believe that if you got Federal money to do drug 
treatment or youth work or any of these other things that were 
secular, that it would be a problem if you had to hire people 
of other religions?
    Reverend Caldwell. Mr. Congressman, we work with folk of 
big faith, little faith and no faith.
    Mr. Frank. So you are not asking for this. In other words, 
if we were to pass this without allowing discrimination in 
employment, that would not be a problem for you?
    Reverend Caldwell. Until I get it, I really do not know, 
but I do not think so. Let me quickly say----
    Mr. Frank. That is the only question I had to ask about. 
Let me just ask again now to Bishop Daniels, when you set up 
that youth center next door, and you had people maybe teaching 
the kids to play basketball or do other things, would they have 
to be only people of your religion? Would it detract from your 
mission if you had to hire people without regard to their 
religion?
    Bishop Daniels. No, it does not detract, but we cannot even 
get to that point.
    Mr. Frank. I understand that. Many of us are in favor of 
that. But let me ask, why do you think it is bad for religion 
to have to hire people of other religions, for running the 
youth center?
    Bishop Daniels. I did not say it was bad.
    Mr. Frank. I know you did not, but I am asking Professor 
Kmiec to explain his view that it is, apparently.
    Mr. Kmiec. I think the way I would approach it, 
congressman, would be this. Every citizen of this country 
contributes to the general fund that this body has to allocate. 
We generally do not say when a taxpayer comes up----
    Mr. Frank. No, you are evading my question. I am sorry. We 
only have five minutes. I am asking you----
    Mr. Kmiec. ----they generally do not say----
    Mr. Frank. Professor, you know better. You know what the 
rules are.
    Mr. Kmiec. ----what religions are----
    Mr. Frank. Mr. Chairman, I ask you to tell the witness to 
stop the filibuster.
    Mr. Green. Let's have some decorum here.
    Mr. Frank. The witness is not answering the question.
    Mr. Green. I believe he is attempting to answer the 
question.
    Mr. Frank. No, he is not.
    Mr. Green. He may not be answering the way you like it.
    Mr. Frank. No, he is not answering. The question is, what 
is wrong in asking a religion--how does it hurt a----
    Mr. Kmiec. What is wrong with it, congressman, is that you 
are making religious believers into second-class citizens. We 
all contribute to the general funds of the United States of 
America. We all have an interest in seeing them fairly 
apportioned. These individuals at this table have a special 
interest in the well-being and welfare of the----
    Mr. Frank. You are not answering my question.
    Mr. Kmiec. I am answering your question directly----
    Mr. Frank. No, you are not.
    Mr. Kmiec. If you wish to use a political polemic----
    Mr. Frank. You are evading the question. The question is, 
how does it hurt their ability to do that if a Christian has to 
hire Jews, if Jews have to hire Protestants, and Protestants 
have to hire Catholics--how does that hurt them in the 
performance of their mission?
    Mr. Kmiec. Well, it hurts them in this sense. It 
fundamentally changes who they are. Congressman Scott said it 
very well in his opening remarks and questions, and I know he 
has serious questions about these constitutional issues as 
well. But one of the things he said very thoughtfully is that 
people come to religious leaders in their community because 
they trust them, because they do good, because they are the 
cement of families and the things of community. These people 
who are those religious leaders cannot just shed their 
religious----
    Mr. Frank. Excuse me, but----
    Mr. Green. The gentleman's time has expired.
    Mr. Scott of Georgia?
    Mr. Frank. Will the gentleman yield to me for 30 seconds, 
please?
    Mr. Green. Mr. Scott?
    Mr. Scott. Yes, I would be glad to yield.
    Mr. Frank. Thank you. I just want to point out how totally 
non-responsive that answer was. Of course, these are good 
people. In fact, one, two said they did not have to 
discriminate. You are imputing to them, frankly, something I 
would not impute to them. You are telling us that for them to 
be able to do their mission and remain true to their religion, 
they have to say that there is something wrong with associating 
with people of other religions. I find that frankly much more 
anti-religious than any other criticisms I have heard, that 
somehow if you are going to be a religious institution, it is 
not enough to have co-religionists in your worship; it is not 
enough to have co-religionists in your religious community; but 
when you then decide to perform a secular function, being 
forced to associate with non-believers somehow detracts. I find 
that a very odd way to defend religious leaders.
    I thank the gentleman for yielding.
    Mr. Scott. Thank you very much. You are certainly welcome.
    My concern is trying to figure out exactly why these 
proposed changes are being offered. It seems to me that these 
restrictions and these regulations were written into the HUD 
requirements for a very important reason, and that was to 
maintain that very important separation of church and state. 
Now, if you could answer for me, of what value and why would we 
want to remove the requirement that employment be religious 
neutral? Why would we want to require that the person being 
employed must be a member of that church or that organization 
or that religion, when in effect this is not private money, but 
all of the people's money from all of the different religions 
made up in this wonderful United States? Why is that of 
benefit? Why do we need to do that? Why do we need to change 
this rule?
    Mr. Kmiec. I do not really think we are changing the rule, 
in fairness, congressman. I think what we are doing is applying 
the principle of Title VII that as very carefully, as 
Congressman Waters pointed out before, navigated the two 
provisions that are in the Constitution. We have to remember 
that the Constitution does not have a separation of church and 
state. It has two simultaneous guarantees of free exercise of 
belief and practice, as well as, as the reverend said before 
me, protection against an establishment of religion. So my 
direct answer to your question, congressman, would be this. We 
do not ask other citizens to shed their most fundamental 
beliefs to participate in Federal programs. These citizens you 
have before you raise money from private sources as well as 
public sources. They ought to have both available to them to do 
good work. They should not have to fundamentally go through a 
metamorphosis and to deny who they are in order to qualify.
    Mr. Scott. But aren't they able to do that now? For 
example, the rule that we are trying to remove states this. It 
says a primarily religious organization receiving funds under 
the program will not discriminate against any employee or 
applicant for employment under the program on the basis of 
religion, and will not limit employment or give preference in 
employment to persons on the basis of religion. It does not say 
you cannot do one or the other.
    It seems to me that this is a very carefully worded, fair 
placement in the rules to allow you to do exactly what you want 
to do, but it also prevents you from discriminating. That is 
the rub here.
    Mr. Kmiec. I certainly agree with regard to any of the 
other prohibited categories that we find, for example, in 
executive order 11246, and nothing that HUD has proposed here 
would invite any form of racial discrimination, national origin 
discrimination and so forth. But we have a special 
constitutional protection for freedom of belief. I think what 
HUD's regulations very thoughtfully are trying to do is to say, 
in regard to that special protection, we are saying to these 
people they do not have to change their character.
    Congressman Waters, again, asked one of the witnesses if he 
had ever applied for a Community Development Block Grant. The 
fact of the matter is, as I understand it, the statutes that 
frame that program have a specific provision in it that say 
recipients, contractors thereunder, will not discriminate on 
the basis or draw distinctions on the basis of religion. Well, 
if the reverend wanted to accept those monies--he indicated 
that he never had--it would fundamentally change the nature of 
the organization that he represents.
    Mr. Scott. Let me ask this, if I may, Mr. Chairman, what 
are some of the problems that you are experiencing now that 
requires us to mandate these changes? To my way of reading 
this, it clearly would remove----
    Mr. Green. The gentleman's time has expired.
    Mr. Scott. Ten seconds please--a much needed protection 
against discrimination. I cannot get an answer to why we are 
doing this. If we could get some answers, if we could get some 
reasons, if we could get some evidence that showed this is what 
we are trying to get to, to remove----
    Mr. Green. The gentleman's has expired.
    The gentleman from North Carolina, Mr. Watt, is recognized 
for five minutes.
    Mr. Watt. Thank you, Mr. Chairman.
    I am going to try assiduously to follow my wife's lesson.
    Mr. Kmiec. I already violated that.
    [Laughter.]
    Mr. Watt. No, no. If you would just stay out of this, I 
think I can do it a lot easier.
    [Laughter.]
    Because I think I see everybody else on this panel kind of 
moving away from you. You have marginalized yourself so much 
that I cannot imagine that there is anybody else on this panel 
that agrees with what you say. If there is, I am going to give 
them a chance to tell me that, but I am going to do it without 
getting stressed out and aggravated.
    Mr. Kmiec. Thank you for that vote of confidence.
    Mr. Watt. Let me just pose this simple hypothetical. You 
have an after school program that the Federal government is 
trying to teach kids to read better. And the most qualified 
teacher to teach the child to read happens to be a person who 
is not affiliated with your denomination. You have somebody in 
your denomination, your church, your congregation that, if you 
just look at him, somebody outside your congregation is better 
qualified to teach that course--teach the child to read. Is 
there anybody on this panel other than Mr. Kmiec who believes 
that you ought to be allowed to discriminate against that 
better qualified teacher because they are not a member of your 
denomination or your congregation? Anybody else on this panel 
take that position?
    Reverend Walker. Assuming there is government funding.
    Mr. Watt. Assuming government funding, yes.
    Reverend Walker. If they are living off the collection 
plate, certainly Title VII----
    Mr. Watt. Right, right. Title VII applies to you in your 
religious activities. You know, you are exempt. You obviously 
are not going to hire a Jewish rabbi to preach at a Baptist 
Church. That is what that was designed to do.
    Well, I mean, not on an ongoing basis. You invite him in as 
a guest minister, but I just want to know, is there anybody on 
this panel who thinks you ought to be able to discriminate 
against the most qualified person to teach that after school 
program.
    Bishop Daniels. Could I just respond?
    Mr. Watt. Yes, sir.
    Bishop Daniels. I think that if you just contain it to the 
question of the most qualified person to teach is just one 
thing. But there is a whole other dynamic in faith-based in the 
real world, and that is very possibly the person that also 
teaches may also have to be the person that will have to open 
the door and close the door, and take care of the property and 
answer to. So there are a lot of components that may be 
included in that, rather than just that one----
    Mr. Watt. So basically what you are saying is you would 
redefine the job and maybe make it more inclusive, so that the 
person that you were interviewing may not be the most qualified 
person after you added all that criteria. I understand that. I 
mean, I am not trying to get you around that. But there is 
something that Mr. Kmiec said that I just fundamentally 
disagree with. This thing--shedding their fundamental beliefs--
I mean, we quit allowing people who had racist views to carry 
out their fundamental beliefs. I mean, it is illegal. Do you 
understand what I am saying?
    Mr. Green. The gentleman's time has expired.
    The chair now recognizes the gentleman from Alabama, Mr. 
Davis, for five minutes.
    Mr. Davis. Thank you, Mr. Chairman.
    Let me pick up on the hypothetical from Mr. Watt. Let me go 
to his Catholic day care school that he talked about. Does 
anyone on this panel believe that if, let's say hypothetically, 
a Catholic day care school accepted money from the Federal 
government, but if say a Southern Baptist family from Alabama 
moved into the neighborhood and the child from the Southern 
Baptist family wanted to go to that Catholic day care center, 
does anybody think that if that institution was getting public 
money they ought to be able to keep that child out?
    Okay. As we say in the courtroom, let the record reflect 
nobody agreed with that. So given that, now let's expand that 
hypothetical. Let's say that a whole bunch of Southern Baptists 
or a whole bunch of Jewish children moved into the neighborhood 
around a Catholic day care center. And let's say that we got to 
the point where the only folk in the Catholic day care center 
were Southern Baptists and Jews. Does anybody on the panel 
think that if that Catholic day care center was getting public 
money, they ought to be able to throw out the Baptists and the 
Jews. Does anybody think that?
    Okay. Let the record reflect nobody thinks that. So given 
that, if it does not fundamentally change, Mr. Kmiec, the 
nature of an institution if a Catholic day care center ends up 
servicing only Jews and Southern Baptists, how does it change 
their character if they end up hiring Jews and Southern 
Baptists?
    Mr. Kmiec. Universities and day care centers and religious 
organizations create themselves because they have a body of 
belief that they want to propagate. They think it is very 
important. I suspect that if there is a Catholic day care 
center, as there are in many urban inner-city areas in this 
country, that their populations frequently are non-Catholic; it 
has turned out that the private schools that have stayed in the 
inner-city areas in this country have been the Catholic 
schools, in many cases, and oftentimes their students do not 
share Catholic belief. But the fact of the matter is that the 
priests and the brothers and the sisters who stay involved in 
that teaching, stay involved in that teaching because they 
believe their faith has something specific to say, even if 
there are nonbelievers in front of them. But they would not 
stay in the business if you told them that they could not share 
their religious beliefs with those people who come to them, 
whatever the religious perspectives of the students may be.
    Mr. Davis. Let me interrupt you just to make this point and 
move to my next question. I think what makes your position 
collapse when it relates to discrimination is a very basic 
point. If it does not change the character of an institution to 
make it serve people of a different faith, I find it impossible 
to see how the character of the institution is somehow 
contaminated if it has to absorb people of a different faith. 
Because you cannot make the Jews and Southern Baptists in that 
school believe whatever is being taught to them, but you still 
have to serve them. So if that, again, does not contaminate, I 
do not see why employment does.
    Let me move to a totally separate point in the limited time 
that I have. What really bothers me about a lot of this is a 
very simple conundrum that I think a lot of the government 
would be faced with. As all of you know, it is difficult 
getting Federal grants under the best of circumstances. Now, if 
somebody does not get a Federal grant right now, they might 
think it is because they did not fill out their paperwork; they 
might think it is because of any number of reasons. If we move 
full-scale in the direction of these faith-based initiatives, 
if a given church does not get a grant, my concern is that that 
church will think that it somehow did not fit the state's test 
for religions, or that that church will think, well, we were 
not religious enough or holy enough. That perception that I 
think would exist with a lot of churches is, in my mind, one of 
the most pernicious things about this movement. Can any of you 
address that concern--the fact that even if we are not 
purporting to do it, we are possibly creating a perception that 
some churches are good enough and some churches are not; that 
some churches serve the state's mission and some churches do 
not. Can anybody address that issue?
    Reverend Anthony. Congressman, I hear what you are saying, 
but I would come down in another perspective. I do not think it 
would be so much that we would think we are not holy enough, 
because politicians cannot determine our spirituality. I would 
simply say that many of us might think we are not political 
enough to the degree that the monies that have been allocated 
are connected to those who are friendly to those in 
Administrations that are doing the allocating. As for me and my 
house, we do have people there who are not of our faith and of 
our tradition. I think in many cases, churches may not even 
want folks who are members of the church because when it comes 
time to firing folk, you have to deal with their whole 
families. It creates a problem.
    And often we share congregations and denominations with 
different preachers and that sort of thing, but in terms of on 
Sunday morning, I am preaching Jesus. So you know that when you 
come. Now, on Monday, Tuesday, Wednesday, Thursday, Friday and 
Saturday in terms of the church at work, that is through our 
community outreach center, that is through our housing program, 
whosoever will will come on Sunday morning, but you know what 
you are getting when you come there. So I think that the real 
rub is that may be those who take advantage of the fact that if 
you do not come down theologically the way I come, then you 
cannot play in the game. And that is where the problem is.
    Mr. Green. The gentleman's time has expired.
    I thank all the witnesses for their testimony today, and 
for their answering questions. The chair notes that some 
members may have additional questions for this panel that they 
may wish to submit in writing. Without objection, the hearing 
record will remain open for 30 days for members to submit 
written questions to these witnesses and to place their 
responses in the record.
    Mr. Frank. Mr. Chairman, also we have some statements from 
others that we would like to place in the record as well.
    Mr. Green. Without objection.
    The hearing is adjourned.
    [Whereupon, at 4:55 p.m., the subcommittee was adjourned.]


                  STRENGTHENING AMERICA'S COMMUNITIES:

                  EXAMINING THE IMPACT OF FAITH-BASED

                      HOUSING PARTNERSHIPS--DAY 2

                              ----------                              


                         Monday, April 28, 2003

                  House of Representatives,
                        Subcommittee on Housing and
                             Community Opportunity,
                           Committee on Financial Services,
                                                   Washington, D.C.
    The subcommittee met, pursuant to call, at 4:00 p.m., in 
Room 2220, Rayburn House Office Building, Hon. Robert W. Ney 
[chairman of the subcommittee] presiding.
    Present: Representatives Ney, Renzi, Watt and Frank (ex 
officio).
    Chairman Ney. Today the subcommittee will hold a second day 
of hearings to examine the effect of faith-based housing 
partnerships, specifically HUD's January 6th, 2003, proposed 
regulation that would provide more opportunities for faith-
based organizations to address the needs of the poor and also 
distressed neighborhoods.
    Although enacted into law in four previous statutes, 
charitable choice has been the subject of persistent discussion 
and debate. President Bush's initiative in the 107th Congress 
to rally the armies of compassion elevated the debate into the 
national spotlight. As the President stated when he announced 
his faith-based initiative, the government has a solemn 
responsibility to help the needs of poor Americans in 
distressed neighborhoods but does not have a monopoly on 
compassion.
    Earlier this month, the Senate passed Senate Bill 476, 
which is aimed at making it easier for religious groups to 
compete for Federal grants and be responsive to the needs of 
their communities. The measure calls for $12.7 billion over 10 
years in new tax incentives for charitable giving and 
additional spending for social services.
    This legislative action follows in the wake of a series of 
initiatives announced by the Bush Administration which 
culminated in HUD's early January proposed rules change. The 
Department's proposed regulation would accomplish the 
following: A, permit the consideration of religion in 
employment practices by religious organizations; B, terminate 
the general requirement that provided services be free from 
religious influence; and, C, prohibit government consideration 
of applicant's religion when distributing funds.
    When it comes to lessening the effects of poverty in 
addressing the needs of those who are suffering, some of the 
most creative and passionate volunteers are affiliated with 
faith-based organizations. It should come as no surprise that 
faith-based organizations have the experience and knowledge to 
meet the social needs of their communities in a more 
compassionate manner than the Federal Government itself in 
Washington. They know their communities, they know the families 
that need assistance, and they know what housing and services 
are available in their neighborhoods.
    In an effort to craft more bipartisan legislation, the Bush 
Administration agreed to the Senate's removal to any mention of 
religion in the bill.
    I appreciate the Administration's willingness to work with 
Congress and look forward to continued cooperation as we 
consider this important endeavor.
    I would also like to thank the members of the subcommittee 
for their commitment and passion towards this issue. No matter 
where they are at on the issue, they have been obviously 
passionate and committed, as well as witnesses, you today, all 
of you for your time in coming here.
    With us today to discuss the Administration's view is Mr. 
John Weicher, Assistant Secretary for Housing, an FHA 
Commissioner at HUD, also more famously known as a former Ohio 
State University professor; as well as HUD's Chief of Staff, 
Frank Jimenez; and Anthony Streeter, the Director of Faith-
Based Programs for HUD.
    Welcome, gentlemen. We look forward to your testimony 
today.
    I would like to recognize the gentleman from Massachusetts, 
Mr. Frank.
    Mr. Frank. Thank you, Mr. Chairman. I appreciate your 
calling this hearing. There was a misunderstanding as to 
whether or not we had wanted HUD to testify in the first round 
of this, and I appreciate the agreement of everyone to move 
forward today.
    I would say that the fact that there aren't more members 
here is not a sign of lack of interest. It is a sign of a lack 
of roll call votes on the floor of the House. Members make 
plans, sometimes in advance. This hearing came afterwards.
    I am glad to be joined by my colleague from North Carolina. 
I appreciate the Chairman making a point of being here. Trying 
to fit hearings in is tough,and I wish this didn't have to be 
on a day when there weren't votes, but I have no complaint 
about that. I had agreed to it, because it is hard to fit them 
in. I appreciate having this much.
    A couple of points, and I will be also outlining some of 
the questions I hope you will answer.
    First, I want to stipulate that we agree that having faith-
based groups involved in the provision of services is very 
important. The position of many of us is that that has been 
going on.
    I will be submitting for the record, and I ask unanimous 
consent, Mr. Chairman----
    Chairman Ney. Without objection.
    Mr. Frank. ----to put in a couple of statements, one of 
which I think is quite relevant, from the National Community 
Development Association, the people who administer at the local 
level the CDBG programs. They make the point that there are in 
fact now literally thousands of faith-based groups across the 
country that do participate through CDBG.
    The question is not whether or not faith-based groups 
participate.
    [The following information can be found on page 131 in the 
appendix.]
    Mr. Frank. At our last hearing we also had people from the 
American Association of Homes and Services for the Aging, a 
majority of whom are religious-based.
    And I was just invited, and couldn't make it because of 
scheduling, to an event honoring Monsignor Michael Groden who 
heads the Archdiocese Office on Housing in Boston.. They have 
been a superb user of Federal housing programs and have helped 
build a great deal of housing. This is the official archdiocese 
office.
    So that is not the question. The question is, for many of 
us, do religious groups, to be able to participate, need to be 
able to discriminate with those Federal funds against 
nonmembers of their religion? That is a very critical question.
    Another question has come up with regard specifically to 
the HUD rule, and that is the feasibility and advisability and 
maybe constitutionality of the commingling of funds, and that 
is one the things that I want to address here.
    We are told that this program, as the President has 
announced it, assumes that people could get money and build a 
building that would be partly for religious purposes and partly 
for nonreligious purposes; and the amount that the building can 
be used in one way or the other would depend on the amount of 
money being put in.
    Now, one question I have is, is that physical or temporal? 
That is, since some religious institutions only have worship 1 
day a week, maybe 2 or 3 days a week, does that mean that you 
could take a building and build it, and if you prayed in it 1 
day a week, then you could use the whole building 6 days a week 
for other purposes? Or is it a physical separation?
    Another question is, how do we enforce some of these rules 
with regard to Community Development Block Grant entitlement 
communities? Frankly, some people have said that the Federal 
Government will be careful with the religious groups that it 
deals with, and that it won't deal with groups that might be 
problematic. But under the Community Development Block Grant I 
assume I understand correctly that an entitlement city under 
this rule could take the money and give it to any religious 
institution it wanted to. Does that mean that the Church of 
Scientology, the Nation of Islam and others would be eligible 
for the money and could then hire only its own members?
    Finally, I was pleased to see Secretary Martinez say at a 
recent hearing here, actually, on the down payment assistance 
program, that he did not think that we were abridging anybody's 
civil rights. Well, I have some questions about that. We have 
an Executive Order, 11246, that goes back to Franklin Roosevelt 
and A. Philip Randolph that has been interpreted by people as 
applying to the Community Development Block Grant program, and 
the Executive Order here says it no longer does.
    We also have this question: There is language in here that 
says the recipients will be independent from State and local 
governments. Does this purport to preempt or to say that State 
and local laws, we don't abide by them?
    And then we have this issue: Congress could, by statute, 
preempt State and local laws. But is the Administration 
contending that the Executive Order--that the President, by 
himself, can affect the binding nature of State and local laws?
    If we have State and local laws through which a grantee 
would ordinarily be subject, is it the position of the 
Administration that this Executive Order diminishes the force 
of those State and local laws? Because I think we run then into 
serious constitutional issues.
    So those are the questions that I will be returning to.
    Thank you, Mr. Chairman.
    Chairman Ney. Thank you.
    Mr. Watt.
    Mr. Watt.  Thank you, Mr. Chairman.
    I think every single one of the questions that my colleague 
from Massachusetts, Mr. Frank, has raised are important issues; 
and I certainly subscribe to them. But the ones I probably have 
the most serious concerns about have to do with the ability of 
religious organizations to discriminate in their employment 
practices and whether the effect of allowing them to 
discriminate on the basis of religion may, in effect, be a 
substitute for allowing them to discriminate on the basis of 
race.
    In my part of the country, 11 o'clock on Sunday morning 
unfortunately is still the most segregated hour in America; and 
if you say to particular religions that--or churches, for that 
matter, even within the same religion, that in the conduct of 
your nonprofit governmental function you have the capacity to 
discriminate on the basis of religion, the effect of that is to 
be saying to them that you have the ability to discriminate on 
the basis of race.
    I personally and the people that I represent and the people 
that have marched and fought and struggled against that kind of 
discrimination for years and years and years cannot abide that 
result. It is that simple for me.
    I am not an opponent of faith-based initiatives. In the 22 
years of legal practice that I had before I was elected to 
Congress in 1992, I was probably regarded, certainly within the 
State of North Carolina, perhaps nationally, as one of the 
lawyers who did more religious representation of institutions, 
church litigation, church reconciliation--you name it, I did a 
little bit of it. There are still institutions throughout my 
Congressional District--housing developments, nonprofit 
developments, senior citizen developments, health care 
developments--all of which originated with a 501(c)(3) 
organization that emanated from a church.
    It is not something that I am alien to. I think it is 
absolutely important and necessary. But in none of those 
situations did they have the capacity through their 501(c)(3) 
organization to discriminate, either on the basis of religion 
or race.
    I just think--we have taken this faith-based initiative and 
made it--and it has become a hot button needlessly, because the 
capacity was already there to do everything that one could do 
that a religious-based organization through a 501(c)(3) could 
do except discriminate and accept commingled funds.
    Those are the two components of this that I think are 
unnecessary and unwise and possibly unconstitutional, and I 
don't know why we have even got to get there to accomplish the 
governmental purpose that we have set out to accomplish, 
because we have been accomplishing it for all of these years.
    So I am concerned about that. I appreciate the chairman 
giving me the opportunity to make an opening statement, and I 
will be asking questions to try to clarify these gentlemen's 
position on that and HUD's position on that and, presumptively, 
this Administration's position on that.
    Thank you.
    Chairman Ney. Thank the gentleman.
    We have also been joined by the gentleman from Arizona, Mr. 
Renzi.
    I want to again thank all of the members for coming here 
today to have the hearing.
    If there is no further request for statements, we will 
begin with Mr. Weicher. Welcome.

STATEMENT OF JOHN C. WEICHER, ASSISTANT SECRETARY FOR HOUSING, 
HUD, ACCOMPANIED BY FRANK R. JIMENEZ, CHIEF OF STAFF, OFFICE OF 
  THE SECRETARY, HUD, AND RYAN STREETER, DIRECTOR, CENTER FOR 
           FAITH-BASED AND COMMUNITY INITIATIVES, HUD

    Mr. Weicher. Thank you, Mr. Chairman, Mr. Frank, Mr. Watt, 
Mr. Renzi, for the opportunity to join you this afternoon to 
discuss this major initiative of President Bush and Secretary 
Martinez. Because of our long history of partnering with faith-
based and community organizations to provide housing and other 
important services, the initiative is especially relevant to 
HUD's work. I am here on behalf of the Department to present 
our views on the role of faith-based organizations.
    With me are Ryan Streeter, Director of the HUD Center for 
Faith-Based and Community Initiatives, and HUD Chief of Staff 
Frank Jimenez, an alumnus of the University of Miami.
    With the committee's permission----
    Chairman Ney. Is that Florida or Ohio?
    Mr. Weicher. Wrong one, sir.
    Chairman Ney. Well, we beat them.
    Mr. Weicher. With the committee's permission, I will be 
referring many questions to them as the principal persons with 
the most detailed knowledge on this subject in the Department.
    The Administration's goals are clear and achievable: to 
provide the best possible quality in government-funded service; 
to support the essential work of all charities, whether secular 
or religious, regardless of their size; and to ensure a level 
playing field for all groups and organizations that are working 
to transform lives.
    These community caretakers fulfill a critical need in this 
country. As President Bush said in October of last year, an 
America without faith-based organizations caring for people in 
need is an America without hope.
    One of the President's first official acts was to sign 
Executive Order 13199, which created the White House Office of 
Faith-Based and Community Initiatives. He directed the Office 
to lead a determined attack on need by strengthening and 
expanding the role of faith-based and community organizations 
in addressing the Nation's social problems. The Office reaches 
into every community of need, while giving special attention to 
homeless individuals, prisoners, at-risk youth, addicts, 
impoverished senior citizens and families moving from welfare 
to work.
    Through Executive Order 13198, the President also created 
Centers for Faith-Based and Community Initiatives in several 
Federal agencies, including HUD. By order of the President, 
these agencies have conducted extensive reviews of regulations 
to identify barriers to participation by faith-based and other 
community organizations in our programs.
    The HUD Center coordinates the work of the Department as we 
seek to eliminate these barriers so that faith-based and other 
community groups can compete for Federal funds on an equal 
footing with other charities.
    We have discovered a number of common obstacles, beginning 
with a prevailing perception among Federal officials that 
collaboration with religious organizations is legally suspect.
    Also, some programs essentially bar religious organizations 
from applying for funding. For instance, HOME funds may not be 
granted to religious organizations, quote, ``for any activity 
including secular activities.''
    Also, there are inappropriate and extensive restrictions on 
religious activities, creating another barrier that restricts 
faith-based organizations from receiving HUD funding. I discuss 
some examples in my prepared statement.
    Both President Bush and Secretary Martinez are working to 
remove these barriers.
    The President took decisive action when he signed Executive 
Order 13279 on December 12th of last year. The order sets out 
clear principles ensuring that all eligible social service 
organizations are able to compete on an equal footing for 
Federal financial assistance. Under the order, Federal programs 
must be implemented in such a way that they do not violate the 
establishment clause and the free exercise clause of the first 
amendment to the Constitution.
    HUD is actively implementing the order to ensure that our 
policies and programs create a level playing field for faith-
based organizations.
    As a first step, Secretary Martinez is actively encouraging 
the participation of grassroots organizations in all grant 
applications. These organizations touch many lives on the local 
level, yet are frequently overshadowed in the grant-making 
process by their larger and more visible cousins.
    Our SuperNOFA for 2003 clearly states that these faith-
based and other community organizations are eligible to apply. 
We are conducting Webcasts specifically designed to educate 
these providers about the SuperNOFA and the application 
process. We have installed a toll-free telephone number to help 
them understand the application process, and we continue to 
make grant applications easier for potential new partners to 
understand.
    Education is key to helping faith-based and other community 
organizations successfully navigate the grant-making process. 
To ensure that this message is heard, we have appointed faith-
based and community liaisons in each of HUD's 10 regional 
offices and 81 field offices. Their job is to reach out to 
faith-based and other community groups that lack experience in 
working with HUD.
    HUD is coupling educational outreach with administrative 
reforms that are removing the barriers to effective 
partnerships with America's community of faith.
    We have reviewed each of HUD's major programs to determine 
the degree to which they comply with the requirements of 
Executive Order 13279.
    To tie these efforts together, HUD issued a proposed rule 
on January 6th of this year that will revise our regulations 
for eight programs and remove unwarranted regulatory barriers 
to the equal participation of faith-based organizations. The 
intent of the proposed rule is to ensure that HUD programs are 
open to all qualified organizations, regardless of their 
religious character. The rule would also clearly establish the 
proper uses of grant funds.
    The public comment period for the proposed rule closed 
March 6th. We are in the process of carefully reviewing the 
comments we have received.
    No matter how big or small the organization, no matter its 
level of experience in competing for Federal grants, no matter 
its religious affiliation or secular nature, HUD wants every 
potential partner to have the opportunity to compete for 
Federal resources. If a faith-based or other community 
organization wants to work with us, and if they can do the job, 
then we will welcome them with open arms and do everything we 
can to help them succeed in their communities. In this way, we 
will provide the best possible service to those who suffer in 
poverty and despair; and we will help to expand society's 
capacity to respond with compassion to human need.
    Thank you, Mr. Chairman.
    Chairman Ney. I want to thank the gentleman for his 
testimony. The other two gentlemen are available if the members 
have questions of them.
    [The prepared statement of John Weicher can be found on 
page 39 in the appendix.]
    Chairman Ney. My questions are going to be centered on the 
process. Because HUD will be one of the first, obviously, of 
the agencies to be coming out with rules. So what will be the 
process in order to finalize this rule?
    Mr. Weicher. It is the normal rulemaking process, Mr. 
Chairman.
    As I mentioned, we have received comments on the rule. The 
comment period closed a little less than 2 months ago. We are 
required to review the comments to consider how we might modify 
the rule in light of the comments; and I might say that in my 
experience at HUD there is--any proposed rule is going to be 
revised in final if there are comments. That is just the norm.
    Chairman Ney. So you would expect some changes?
    Mr. Weicher. I would, because we always wind up having 
changes.
    Then we will--the final rule--we will draft the final rule, 
and the preamble to the final rule will explain how we reacted 
to each of the major kinds of comments we received in the 
comment period.
    That rule is then reviewed by OMB. The formal review period 
for OMB is 90 days, and after their approval it is submitted to 
the Federal Register and becomes final.
    Chairman Ney. Do you have any anticipated guesstimate of 
when it will be finalized?
    Mr. Weicher. No, Mr. Chairman. I can't really give you an 
estimate on that. We certainly will be moving on it as 
expeditiously as we can, but I can't really give you a date on 
it.
    Chairman Ney. Thank you.
    Mr. Frank.
    Mr. Frank. Mr. Weicher, I know this is not your primary 
area of responsibility. I appreciate that we have a group that 
includes it.
    Under the Community Development Block Grant statute, as it 
now exists, Section 109, states: No person in the U.S. shall, 
on the ground of race, color, national origin, religion or sex, 
be excluded from participation in, be denied the benefits of, 
CDBG.'' Now that is the statute.
    As I read the Executive Order with CDBG, it says that you 
cannot be denied the benefit of a program, but it leaves out 
employment. Is it the Administration's intention to allow 
grantees to discriminate based on religion under the CDBG 
program, that is, to decline to hire someone not of their 
religion, if they choose to?
    Mr. Weicher. Mr. Frank, with your permission, I will refer 
that question to Mr. Jimenez.
    Mr. Jimenez. Thank you, Mr. Congressman. We are actually 
grateful for this opportunity----
    Mr. Frank. We have 5 minutes. So what is the specific 
answer?
    Mr. Jimenez. The answer is no. Nothing in the proposed 
regulation or in the Executive Order attempts to override the 
CDBG statute on the point of religious hiring.
    Mr. Frank. Okay. So under the CDBG program, recipients 
could not discriminate in hiring based on religion, correct?
    Mr. Jimenez. That is correct. That is because Congress has 
passed a more specific statute.
    Mr. Frank. Right. But in every other HUD program you could?
    Mr. Jimenez. It is my understanding that there is one other 
specific statute governing the HOME program where Congress has 
in that specific statute, as with CDBG, revoked the freedom 
that it gave religious organizations in Title VII, the freedom 
to take religion into account when hiring.
    Mr. Frank. So the position of HUD then is that you 
recognize that where there is a statutory requirement that 
there be no discrimination based on religion, then there cannot 
be under this Executive Order, but in every other HUD program 
you could discriminate based on religion as a grantee?
    Mr. Jimenez. Yes, sir. This proposed rule covers six 
other----
    Mr. Frank. So the answer is yes.
    Secondly, with regard to preemption or diminution of State 
and local laws, what--there is language in here--it doesn't say 
specifically is that they don't apply. It says they will retain 
their independence from State and local laws. I must say that 
as we debated that, as I recall, a couple of years ago on the 
floor of the House and in committee the general understanding 
was that that probably meant that they wouldn't have to comply 
with them.
    What is the effect? If there is a State or local law 
requiring nondiscrimination based on sexual orientation or 
marital status or religion, does that apply or not apply?
    Mr. Jimenez. Neither the proposed regulation nor the 
Executive Order, as you indicated, specifically addresses the 
issue of preemption.
    Mr. Frank. That is what I am asking you now. What do you 
think it means? How are you guys going to interpret it?
    Mr. Jimenez. It is the Administration's position that--
first of all, preemption questions are highly unlikely to arise 
because----
    Mr. Frank. They just did. Excuse me. I hate to contradict 
you. I just raised it.
    Mr. Jimenez. In the real world outside of Congress.
    Mr. Frank. Let me just say that you are wrong. We have had 
this with regard to San Francisco. We have had it with regard 
to New York City. The notion that there won't be some conflict 
between local laws and Federal policy--in fact, we had a debate 
on the floor of the House about whether or not we would change 
the law because of a domestic partnership issue involving San 
Francisco. I think it was under some Federal program.
    So I need to know the answer. What is your answer?
    Mr. Jimenez. I believe you are correct. They will arise 
from time to time, just not regularly. But the answer is that 
preemption questions are to be decided be the courts on a case-
by-case basis.
    Mr. Frank. They won't be decided by the courts unless 
someone gets them into the courts.
    What is the Administration's position? You say the 
Administration is not going to take a position?
    Mr. Jimenez. If a State or local ordinance specifically 
targets faith-based organizations----
    Mr. Frank. Mr. Jimenez, stop beating around the bush. You 
know better. If you don't want to answer the question, tell me. 
You are not here under subpoena. You can refuse to answer the 
question. But let's not waste time.
    We are not talking, as you know, about laws that 
specifically target religious groups. We are talking about an 
antidiscrimination law of general applicability at the State or 
local level that a religious organization may feel impinges on 
it. Is it the Administration's position that they cannot abide 
by that because of the language here about their independence 
from State and local governments?
    Mr. Jimenez. Neither the proposed regulation nor the 
Executive Order take a position on that question.
    Mr. Frank. So the Administration has no position on it?
    Mr. Jimenez. No, sir. Not at this time.
    Mr. Frank. Let me ask Mr. Weicher. If I am a Mayor of a 
city, I ask HUD: What does it mean? Or if I ask the general 
counsel, what would you tell me?
    Mr. Weicher. Mr. Frank, it will be--when the issue is 
raised, it would be addressed by the Department and by the 
Administration. It would not be addressed by my office, of 
course, but it would be addressed.
    Mr. Frank. You are here as HUD's representative.
    Mr. Weicher. Yes. But, as you know, I am not a lawyer.
    Mr. Frank. That is very disappointing. Let me give you the 
answer I don't think you want to give. The answer is, yes, you 
want it to be preempted, but you are a little bit unclear about 
the ability to preempt a State law by Executive Order. I must 
say, when this arose in the context of the statute, it was 
clear that that same language was intended to be preemptive. 
And, because you are now dealing with a situation where you 
can't preempt you are going to duck the question.
    But I people ought to be clear that that is the--that was 
the intention, that is essentially what you have in mind.
    Mr. Jimenez. Sir, if it were specifically intended to be 
preemptive, there would have been language to that effect.
    Mr. Frank. No, because if you got too explicit you could 
run into some kinds of problems. It was specifically intended 
to be preemptive. But let me ask you, as a matter of policy, do 
you think it should or shouldn't be?
    Mr. Jimenez. My personal opinion, I believe----
    Mr. Frank. No, not your personal opinion, HUD, the official 
Administration position. You are not here personally. You are 
here as a representative of the Administration.
    Mr. Jimenez. As I said earlier, each case would have to be 
determined on the facts of each specific case. So we would make 
that determination on a case-by-case basis. We would look at 
the local or State ordinance in question, we would look at the 
terminology, the intended effect, the scope of the ordinance or 
the law, and then apply the law as we understand it at that 
time. But we don't see this rule or the Executive Order as 
having a blanket preemptive effect one way or the other.
    Chairman Ney. The time of the gentleman has expired.
    Mr. Renzi.
    Mr. Frank. It is a waste of time. Go ahead.
    Mr. Renzi. Thank you.
    Thank you all for your testimony.
    Maybe following up a little bit with the ranking member, we 
have got 501(c)(3) organizations out there who currently, under 
Title VII, are allowed to hire based upon religious 
preferences. But when they receive the Federal moneys they 
can't deny services, they can't deny providing their best 
efforts to any organization, so they cannot discriminate based 
on religion; is that correct?
    Mr. Jimenez. The proposed regulation makes very clear that, 
for all eight of the grant programs covered by the regulation, 
the recipient of the funds cannot take religion into account 
when determining who receives their services. So beneficiaries 
must have access to that organization's services regardless of 
religious belief or practice.
    Mr. Renzi. So we are not going to discriminate on how the 
Federal monies are used. We are going to set up a law that 
allows them to use the money. Is there any oversight then that 
follows up a year or 2 years from now? Is there any kind of 
Federal accounting that says, okay, not only are we going to 
say you can't do that but we are going to come back later and 
make sure that you are not doing that?
    Mr. Jimenez. The purpose and the intent of the regulation 
is to place faith-based organizations on an equal footing with 
secular organizations. HUD intends to treat faith-based 
organizations in the very same way that it treats secular 
organizations. That means that all grant recipients, secular 
and faith-based alike, will be required to sign general 
assurances of compliance with all applicable laws and 
regulations; and then, in addition, there will be the periodic 
compliance review that HUD performs on all grant recipients, 
not just secular or faith-based.
    Mr. Renzi. So you will actually be able to know that up 
front, provide the language that says you can't do this, you 
are going to be able to do the oversight and watch how the 
monies are spent?
    Mr. Jimenez. Yes, sir.
    Mr. Renzi. So there really is no threat of discrimination 
here, particularly if we have that oversight feature?
    Mr. Jimenez. Not at all, sir.
    Mr. Renzi. Let me move to a question that I had. I was 
really privileged before I came to Congress to insure 1,700 
non-profit organizations across the United States, insure more 
crisis centers for domestic violence against battered, abused 
women and children than any other insurance agent in the 
country; and I learned a lot from it.
    When I would go to the conventions, in particular one in 
Seattle one year where the domestic violence center leaders 
were there, I saw a split as to whether or not there should be 
a reliance on Federal funding, nonprofit organizations getting 
on the Federal dole, maybe at times losing some of their--or 
losing, maybe not spending as much time or strength of effort 
in building their donor base, which is a lot of, I believe, if 
I am right, a lot of where these nonprofit organizations get 
their revenues from.
    Is it--what is your feeling on--any of the panel--on 
setting up a Federal dole or setting up a Federal pipeline to 
help these organizations? Are there unintended consequences 
that they have become too reliant?
    Mr. Streeter. That is really a decision that each of those 
organizations needs to make for itself. I think, for our 
purposes here, the interest we have is in--as Mr. Jimenez said, 
leveling the playing field for faith-based organizations.
    We wanted to make sure that for all interested applicants 
it be as fair and open a competition as possible, and whether 
or not an organization would want to receive funding really 
depends on their willingness to compete.
    Mr. Renzi. Well said.
    Let me say this to you. The Habitat for Humanity has laid 
out a model that is exceptional. Our former President, Jimmy 
Carter, becoming one of the Nation's best leaders of Habitat 
for Humanity, a secular organization. If nonprofit 501(c)(3) 
organizations want to reflect that model, want to become those 
type of organizations in small communities that help build 
houses in 48 hours, these Federal funds will help them become 
mini Habitat for Humanities; am I right?
    Mr. Streeter. Federal funds under the programs affected by 
this rule, you mean?
    Mr. Renzi. Yes.
    Mr. Streeter. Uh-huh.
    Mr. Renzi. In other words, you could have non-government-
based organizations, faith-based organizations become small 
Habitat for Humanities across the country where we could 
actually build more homes?
    Mr. Streeter. That is right, as long as the organizations 
choose to build themselves that way. We are not designing any 
specific programs here for faith-based organizations. Rather, 
we are opening up the competition by changing the regulations 
so it is a level playing field.
    Mr. Renzi. What other areas--or how--what creative ideas 
have you seen that these moneys could be used for good work? 
Where is the--my example is neutral. Where is the good housing 
going to be put to work?
    Mr. Streeter. Well, every day there are people doing great 
things with very small budgets in communities all across the 
country. They work in all kinds of fields, providing shelter 
for the homeless, providing shelter and stable housing for the 
elderly and the disabled; and often that is done by those who 
have deep roots in the communities where the people are that 
they are serving. Those are grassroots organizations who, for a 
number of reasons, both faith-based and secular groups, have 
not been in our networks, have been intimidated by the 
regulations as they currently stand on the books.
    Mr. Renzi. Well said. So if we are able to get Federal 
funds to those organizations, we are going to build more 
houses, we are going to be able to home and provide safe areas, 
warm comfort for homeless, we are going to feed more people, we 
are going to reach out, to take better care on the street, with 
the needy.
    Mr. Streeter. It is our view that by increasing the field 
of competitors that the end result is a better quality service 
for the people in need.
    Mr. Renzi. Thank you, sir. Thank you.
    Chairman Ney. Thank you.
    Mr. Watt.
    Mr. Watt. Thank you, Mr. Chairman.
    I neglected to say hello to my friend, Mr. Streeter. I met 
you in Charlotte. Good to see you again. I meant to say that 
when I first came in. I knew that I had seen you before, but it 
is great to see you again. I appreciate you all being here.
    Let me just kind of get--I mean, I am reading something 
here that--and I wanted you all to maybe set me at ease that I 
shouldn't be concerned about what I am concerned about.
    It is not the discrimination in the recipients of a 
particular service. I presume that that is something that you 
can enforce. But, under HOPE III, under housing opportunities 
for persons with AIDS, under Emergency Shelter Grant programs, 
ESG, under shelter plus care, and under Supportive Housing 
Program, SHP, and under youth bill, the Federal Regulations 24 
CFR and the particular sections that related to each of those 
programs had a provision which said: A primarily religious 
organization receiving funds under the program will not 
discriminate against any employee or applicant for employment 
under the program on the basis of religion and will not limit 
employment or give preference in employment to persons on the 
basis of religion.
    The proposed rules delete that language in 24 CFR. Now that 
may be because it was unnecessary because these organizations, 
religious organizations and all other organizations, can't 
discriminate in employment.
    The problem is that religious organizations can 
discriminate in employment on the basis of religion. My 
concern--and all of black America's concern, to be honest with 
you--is that by eliminating those provisions you have invited 
churches to discriminate in their employment practices on the 
basis of religion; and the result of that is not only to allow 
them to discriminate on the basis of religion but that the 
result of their being able to discriminate on the basis of 
religion is synonymous, in 95 percent of religious America, 
with allowing them to discriminate on the basis of race.
    Now the simple question I am raising is, should I not be 
concerned about that? Is that not the intent of this 
Administration or can religious organizations now discriminate 
under these proposed rules? If the proposed rules were adopted, 
would they be allowed to discriminate in the delivery of these 
services on the basis of religion? Would they be able to say, 
if you are not Jewish, you can't work here? We hire only Jewish 
employees because we are a Jewish church--in the delivery. Then 
what happens then if a nonJewish person happens to be the most 
qualified person?
    Or if it is a white church--and in my area of the country, 
still, most of most churches are either black or white--can 
they say, we hire only Baptists who are members of our church 
and therefore we hire no black people?
    That is the question I am--you know, if you can set me at 
ease about that question, you know, I don't have any problem 
with this program. Now, somebody please set me at ease about 
this. Is that what you are intending, or put--if not, why did 
you terminate these provisions?
    Mr. Jimenez. Mr. Congressman, I would be happy to attempt 
to answer your question. I know that you know this already, but 
for those in attendance today who may not know this let me just 
state for the record that our rule is very clear that all 
faith-based organizations are subject to the parts of Title VII 
that prohibit discrimination on the basis of race as well as 
gender, national origin----
    Mr. Watt. You are playing games with me, Mr. Jimenez. You 
are playing games with me now. That does not answer my 
question.
    Mr. Jimenez. I didn't finish with my answer, sir.
    Mr. Watt. Go ahead.
    Mr. Jimenez. But I think that needs to be said for the 
record, to put the minds of people here at ease who may think 
that our rule directly allows discrimination on the basis of 
race. It does not.
    On your question about whether or not the rule allows 
faith-based organizations to take religion into account when 
hiring----
    Mr. Watt. To discriminate on the basis of religion.
    Mr. Jimenez. To take religion into account----
    Mr. Watt. To discriminate.
    Mr. Jimenez. ----hiring decisions. HUD is not breaking new 
ground here. To lay out the groundwork, Congress in 1964 gave 
all faith-based organizations the right to take religion into 
account when hiring. Congress expanded that right in 1972. The 
Supreme Court upheld that right as constitutional in 1987.
    Mr. Watt. So you are saying now that you take what the 
Supreme Court said to extend all of the way over into building 
a house out there; and if I am not a member of your church, 
even if I am the most qualified employee out there to build 
that house, you can refuse to hire me.
    Mr. Jimenez. Actually, we are not taking the Supreme 
Court's lead so much as we are following Congress' lead. This 
rule covers eight different grant programs. Congress said that 
faith-based organizations cannot take religion into account 
when hiring for two of these programs. For the remaining six, 
the ones that you named, Congress has had the opportunity, 
ample opportunity to take back from faith-based organizations 
their freedom to take religion----
    Mr. Watt. Mr. Jimenez, if that is the official position of 
this Administration, I am saying point blank to you and this 
Administration that that is a racist position. It is, and that 
will be the result of it, and I can't be any more blunt than 
that.
    Now if you want to be labeled with that, if HUD wants to be 
labeled with this, if this Administration wants to be labeled 
with that, then so be it. But what you just said to me is that 
you think it is okay. You think everything I just described to 
you is okay. I think you are making a serious, serious 
misjudgment; and I think this Administration is.
    I yield back the balance of my time.
    Chairman Ney. What I will do is--the gentleman yields back 
the balance of his time. On my time here, I have got another 
question, but I will let you put your thoughts out.
    Mr. Jimenez. Congressman Watt, just to be clear, any faith-
based organization that uses its religious hiring freedom as a 
pretext for racial discrimination, in my opinion, in HUD's 
opinion, in this Administration's opinion, is doing something 
reprehensible and illegal. One cannot use the religious hiring 
freedom as a pretext for racial discrimination.
    But, more importantly, I don't think when Congress--with 
respect to six of these eight grant programs, when Congress 
allowed the faith-based recipients of those funds to take 
religion into account in hiring, I don't think Congress thought 
that it was performing a racist act; and this Administration 
certainly doesn't believe that either.
    Chairman Ney. Let me ask you this--we will go another round 
of questioning. What is your--to get it clear in my mind--I 
don't know the legal history of this, but what you are saying 
is that this has existed for X number of years, 1964, 1972. Was 
there any change in the last 10 years on this or----
    Mr. Jimenez. I would be happy to lay it out for you.
    This CDBG statute was authorized by the Congress in 1974.
    In 1990, Congress amended that statute and said that faith-
based recipients of CDBG funds don't have religious hiring 
freedoms.
    In 1990, Congress first authorized the HOME program and, at 
the same time, said that faith-based recipients of Home funds 
do not enjoy religious hiring freedoms.
    That is the first two of the eight grant programs covered 
by this rule. There are six others. Two of them were passed or 
first authorized by Congress in 1987. The remaining four were 
first authorized by Congress in 1990. Congress knew how to tell 
faith-based organization that they did not have religious 
hiring freedoms and Congress demonstrated how with respect to 
the first two grant programs.
    But Congress deliberately did not do the same with respect 
to the other six. We are simply following Congress' lead, and 
we think Congress----
    Chairman Ney. This existed before President Bush?
    Mr. Jimenez. That is correct.
    Mr. Frank. Before one President Bush, not before the other.
    Mr. Ney. And after 41, then President Clinton. So this has 
been there.
    Mr. Jimenez. This has been the law.
    Chairman Ney. Whether they were Democrat controlled or a 
Democrat or Republican President and they didn't change it?
    Mr. Jimenez. Exactly.
    Chairman Ney. So, therefore, would we consider them racist? 
I am trying to lay it out. Although people might want to change 
it. It might be the desire of Congress to change it.
    Mr. Jimenez. If Congress wants to take some or all of the 
remaining six and say that faith-based organizations do not 
enjoy religious hiring freedoms, that is Congress' prerogative. 
I don't think the Administration is necessarily calling on 
Congress to do that, but Congress has that freedom if it 
wishes.
    Chairman Ney. Let me ask the question--as this started, as 
I assume there were some barriers, that is why this issue came 
up. I think it came up like--I don't know, one of the Senators 
had supported this during the election process, and both sides 
of the aisle had come out with some type of idea to stop 
barriers, or groups just because they were of a certain 
religion, if I can recall on this issue.
    What kind of barriers were out there? What kind of 
government--do you have any idea of what some of the government 
barriers were for these groups?
    Mr. Streeter. I will be happy to answer that question, Mr. 
Chairman.
    With respect to the proposed rule and the current 
regulations that are on the books, we had in seven of the eight 
programs here, for instance, prohibitions on anything bordering 
on religious influences. That generally tends to be implemented 
sort of at the lowest possible level. People would tend to shun 
faith-based organizations altogether if they have any doubt as 
to whether or not this organization was the kind of 
organization that should be funded under a given program. Two 
programs outright exclude faith-based organizations as a 
general rule.
    Again, the way this translates on the street into a barrier 
is that a local official, whether it is a local CDBG official 
from a city or a HUD official in a field office, will be of the 
mind and have been of the mind that they ought to instruct 
faith-based organizations either not to apply or will tell 
others not to work with faith-based organizations. That has, in 
fact, happened. So that would be a barrier.
    Overall, we just find that there is a problem with the tone 
in the regulations; and they make it very, very difficult for 
faith-based organizations to apply if there is any question. We 
have run into a number of cases where faith-based organizations 
have had problems on this front simply because they have been 
told they better not apply or, if they do, they need to 
completely strip their facilities of anything that looks 
religious and the like.
    There are other barriers as well. I mean, there are 
barriers in the grants process, which doesn't necessarily apply 
to this proposed rule, but there are barriers as well in terms 
of the complexity of the documents that are required to file in 
terms of the application process as a whole and the documents 
that support it. We have been engaged in an effort to simplify 
that as well so that it is easier for smaller grass roots 
organizations to understand.
    Chairman Ney. Thanks.
    Mr. Frank.
    Mr. Frank. That part is not controversial. I note in the 
Executive Order in Part 3 it is repetitive. It applies to eight 
programs. The parts that say you can't be penalized for your 
religious character, which is in Part 1, the parts that say you 
shouldn't be penalized for religious name, those are 
noncontroversial. In fact, they are often not followed, and 
they should not have been followed, and they should have been 
changed.
    So that is not controversial, much of what you said. What 
is controversial is what Mr. Watt mentioned.
    Now, Mr. Jimenez, I know you just forgot--I am sure it was 
on your mind, but you forgot to mention that those six programs 
you talked about where you said Congress in fact did not 
include in discrimination language, but from almost the 
beginning regulations were promulgated, beginning with 
President Bush and then President Clinton, which did in fact 
say no religious discrimination.
    So my sense has been here is that Congress didn't feel the 
need to do that because all of them did have that language in 
there. So two had it statutorily, but the other six programs 
you talk about have, from their beginning, had language 
promulgated by regulation which said you couldn't discriminate. 
That was President Bush and President Clinton.
    And you didn't then answer Mr. Watt's question. You gave a 
history of it. But, in fact, previously, while they didn't have 
that--they weren't prohibited by statute from religious 
discrimination, they were prohibited by regulation.
    Mr. Jimenez. That is absolutely correct.
    Mr. Frank. Thank you.
    What then about the substantive question Mr. Watt asked?
    Let me put it to you this way. Under CDBG, you are the 
experts in this program. A Mayor who decides to give the money 
to the Nation of Islam to protect housing authority security--
that happened before, in fact. I remember a number of my 
Republican colleagues were quite exercised about it. Under 
these regulations, a Mayor who decides to give the Nation of 
Islam money to protect his or her housing tenants, that is 
perfectly okay, and the Nation of Islam may employ only its 
congregants; is that correct?
    Mr. Jimenez. Well, it is a two-part question, as I hear it. 
The first part was whether or not they could give services or 
permit only adherents to be beneficiaries, and the answer is 
no.
    Mr. Frank. Not beneficiaries. We are talking only about 
employees. You know that, Mr. Jimenez. You are not being honest 
with us intellectually. I am disappointed in that. You know we 
are talking about employees. We are asking about whether a 
Mayor can give money to the Nation of Islam to provide security 
services and hire only congregants of the Nation of Islam? Is 
that----
    Mr. Jimenez. I am being completely honest. I thought I 
heard in your answer something about beneficiaries. However, as 
far as taking religion into account when hiring----
    Mr. Frank. No, answer the question. It is a simple 
question. The Nation of Islam, under these rules, are they an 
eligible grantee and can they then hire only people who are 
members of the Nation of Islam?
    Mr. Jimenez. If the Nation of Islam is a legitimate 
religious organization. I don't know enough about the Nation of 
Islam to comment on that.
    Mr. Frank. I had hoped maybe you would answer a question 
honestly. I think you are not.
    Next one. How about Scientology? Suppose a Mayor somewhere 
gives a grant to the Church of Scientology, which has been 
recognized as a religion. You say legitimate religion. I assume 
the test here is--let me ask. Is there a test other than the 
one we use, the IRS' tax exemption? Is there some other test 
that is going to be involved here as to whether you are a 
legitimate religion? That would make us very nervous. How do 
you decide?
    Mr. Jimenez. The only test that this Administration applies 
is whether or not the services provided by the faith-based 
organization work.
    Mr. Frank. No, Mr. Jimenez, you are changing the subject, 
and you know it. You said you don't know if the Nation of Islam 
is a legitimate religion. I understood they were a legitimate 
religion by the applicable test: They got a tax exemption, and 
they are recognized by the IRS. Are you suggesting that there 
is some additional test as to whether or not you are a 
legitimate religion to qualify?
    Mr. Jimenez. I don't know if there is something else about 
the Nation of Islam that could disqualify them from the 
program.
    Mr. Frank. I am asking you procedurally now. Your 
determination not to answer tough questions is impressive, but 
it doesn't get you away from the tough issues. In this program, 
it says faith-based organizations. We are talking now not about 
HUD but about the entitlement communities. I am the Mayor of an 
entitlement community. Under this program, if it is legally 
recognized as a religion by State and Federal law, are they 
then automatically eligible for grants under the CDBG faith-
based program and can hire only their own?
    Mr. Jimenez. If there were no other disqualifying factors, 
any faith-based organization----
    Mr. Frank. What disqualifying factors would there be?
    Mr. Jimenez. I am not familiar enough.
    Mr. Frank. I get it. I think the fact that you don't 
answer----
    Mr. Jimenez. Sir, I will answer your question as directly 
as I can.
    Mr. Frank. What about Scientology?
    Mr. Jimenez. If they have--sir, if they provide a service 
that fits within the HUD criteria of providing either services 
for the homeless----
    Mr. Frank. Not CDBG--but let me ask you another question. 
In terms of the money that goes to build the house of worship 
for dual purpose that can be partially a house of worship, is 
that measured physically or temporally? Can I say, okay, 22 
percent of the building was built with public funds, and it can 
be used 22 percent of the time for religious purposes, or 22 
percent of the building or 11 percent half of the time? I mean, 
what are the rules that apply? Can it be temporal? Can I say 22 
percent of the money came from the Federal Government. The 
building can be used 78 percent of the time, the whole 
building, for religious purposes? Is that accurate?
    Mr. Jimenez. Yes. That was our intention.
    Mr. Frank. Okay.
    Mr. Jimenez. There is more here that I think that you would 
like to hear, with all due respect, Mr. Congressman. On that 
particular part of the HUD rule, it was never HUD's intent to 
subsidize, even partly, principal places of worship. Upon 
issuing the proposed rule and hearing comments about the rule--
--
    Mr. Frank. You are changing it?
    Mr. Jimenez. Well, we are closely considering all comments 
that have been received.
    Mr. Frank. I am glad you are closely considering all 
comments.
    Mr. Jimenez. We are considering several options of amending 
the language.
    Mr. Frank. The part that says CDBG funds may be used for 
the acquisition, construction or rehabilitation of structures, 
where a structure is used for both eligible and inherently 
religious activities, they may not exceed the cost of those 
portions, et cetera, that is under serious consideration to be 
changed?
    Mr. Jimenez. That is. We think that there is a way of 
clarifying our intent and easing some of the concerns about 
that language, and we are presently entertaining options.
    Mr. Frank. Last question.
    Mr. Frank. Last question, to go back to the point that Mr. 
Watt and I have been trying so hard to get an answer, the fact 
that the effect of religious-based hiring might be racially 
exclusionary, Orthodox Jews in Brooklyn, Mormons somewhere 
else, the Nation of Islam in Baltimore, is that, in and of 
itself, a disqualifying factor in your mind and in the minds of 
the Administration?
    Mr. Jimenez. If racial discrimination is intended?
    Mr. Frank. No, not if it is intended. You know that we are 
not talking about intended. You are not being honest. You know 
that is not what we are talking about. We are talking about the 
fact that there aren't very many black Orthodox Jews. There 
aren't very many white members of the Nation of Islam. If the 
effect in this is to get a segregated impact, is that in any 
way a problem from the Administration standpoint?
    Mr. Jimenez. We agree with Congress that the freedom to 
take religion into account in hiring is a freedom that should 
generally----
    Mr. Frank. Would you answer my question? Does the fact that 
it might have a racially discriminatory or exclusionary aspect, 
is that troubling? I didn't ask you whether or not you agree.
    Mr. Jimenez. I think it is troubling on a personal basis, 
but I think on a legal basis----
    Mr. Frank. On the Administration basis, from the 
Administration standpoint, is it irrelevant as a policy matter?
    Mr. Jimenez. I think it is irrelevant as a legal matter. As 
a policy matter, I think it is relevant. But there are many 
things in this country that are troubling, and I think we 
should all as people----
    Mr. Frank. Are you doing anything about it, if it is 
troubling as a policy matter?
    Mr. Jimenez. Is the question whether or not we are doing 
anything to end de facto segregation?
    Mr. Frank. That isn't what I asked.
    Chairman Ney. The time of the gentleman has expired.
    Mr. Renzi.
    Mr. Renzi. Thank you, Mr. Chairman.
    When we talk about the true effect or the true intent here, 
isn't it really honorable though that what we are trying to do 
is that we have got faith-based organizations that are already 
established in the community, who have already proven 
themselves worthy of good deeds in the community, who 
currently, legally are allowed to discriminate based upon 
hiring practices as to faith? These are established Title VII 
freedoms. These organizations are now in a position where they 
can expand services or provide services and that those 
services, the populations that they will actually serve are the 
disadvantaged, are the most needy, are at times the Hispanics 
in Arizona. And so, if we are able to get the Federal funds to 
these organizations who are currently doing good with their 
work, then the most needy, the most disadvantaged of all races 
and colors and creeds and genders will be the ones who benefit. 
Isn't that really the honorable intent and not to discriminate 
as this discussion has been taking?
    Mr. Jimenez. All along this Administration has been very 
clear. The focus should be primarily the people in need, the 
people who are suffering, the people who need services.
    We have found in our experience that many faith-based 
organizations themselves either represent a disproportionately 
minority population or serve a disproportionately minority 
clientele. These changes are going to make it easier for faith-
based organizations to help the people all throughout America 
and especially in inner cities and other places.
    Mr. Renzi. You mean to tell me, you actually have people of 
faith who are actually helping people of color, sir, in a 
disproportionate aspect as to the amount of white people who 
are working for them? You mean we actually have faith-based 
organizations who are, right now, disproportionate as to the 
numbers of employees? So if you were to take the number of 
employees that they have in the organization and you look at 
where their dollars are going, where the real help is going, 
you are seeing that they are actually helping people of color, 
people of need, people of poverty, is that what you are telling 
me?
    Mr. Jimenez. Absolutely. And that is what we see in our 
experience everyday. And I might also add, the religious hiring 
freedom that was given by Congress when Title VII of the Civil 
Rights Act of 1964 was passed, that freedom is not a 
controversial one. It was affirmed in '64, reaffirmed in '72 
with broad, bipartisan support in Congress. It was unanimously 
upheld as constitutional by the Supreme Court in 1987.
    This is not a controversial freedom.
    Mr. Renzi. Thank you.
    Chairman Ney. Mr. Watt?
    Mr. Watt. Let me just direct this to Mr. Renzi, since he 
seems to be directing all his comments toward me.
    Mr. Renzi. Not directed towards you, but directed towards 
the goodness of the programs.
    Mr. Watt. And just make it clear to you, from my 
perspective, the ends don't justify any means. When you fought 
as hard to eliminate discrimination and segregation and racism 
as I have, even sometimes when you get good ends, you've still 
got to look at the means through which that happens. And we 
will have that conversation in private if you would like, if 
you would like to pursue it, but let me get back to this.
    Mr. Weicher, you have let them run your interference for 
you, and I don't mean that in any negative sense. But it is 
your statement that was the statement that we started with, and 
your statement on Page 2 says--describes the President's order 
of December 12, Executive Order 13279, that sets out clear 
principles, and I am quoting, ``Ensuring that all eligible 
social service organizations are able to compete on an equal 
footing for Federal financial assistance.'' and then the next 
paragraph, you say, ``HUD is simply''--well, you say, ``HUD''--
I am quoting, ``HUD is actively implementing the order to 
ensure that our policies and programs create a level playing 
field for faith-based organizations.
    Now, I take it that a level playing field would be a 
playing field that either allows discrimination or doesn't 
allow discrimination, Habitat for Humanity, none of the 
501(c)(3)organizations have the ability to discriminate on the 
basis of race. How is it that giving churches, who are grant 
recipients, the right to discriminate on the basis of race or 
religion creates some level playing field? There is something 
unequal about that as far as I am concerned.
    If I set up a 501(c)(3) organization, I am bound by the 
civil rights laws of this country. I can't discriminate on the 
basis of race or religion.
    Mr. Renzi. Yes, you can. Sorry to interrupt you, sir. Yes, 
you can, but that is the point, under Title VII, you can 
discriminate.
    Chairman Ney. Would the gentleman like to yield or not?
    Mr. Watt. Why don't I just ask my questions to Mr. Renzi, 
since he knows so damn much about this. And I wouldn't like to 
be interrupted either.
    Chairman Ney. You can continue.
    Mr. Watt. Now, churches have the right to discriminate in 
their religious activities, 501(c)(3) organizations do not. Is 
that correct or not correct, Mr. Weicher?
    Mr. Weicher. Mr. Watt, as I was saying to Mr. Frank, I am 
not a lawyer, and I am not an expert.
    Mr. Watt. Why did they send you over here to deliver this?
    Mr. Frank. Will the gentleman yield? I can answer that.
    Because when we wrote the letter, we said that we would 
want someone at the assistant-secretary level or above, and Mr. 
Weicher seemed to be the only assistant secretary in town 
today.
    Mr. Watt. Okay. At least there is some rational 
explanation.
    Mr. Frank. If the gentleman would let me yield further.
    And they think the Administration was not interested in 
giving answers to some of these questions at a level where they 
might sort of have trouble backing away later.
    Mr. Watt. All right, Mr. Jimenez.
    Chairman Ney. Would the gentleman yield?
    Go ahead.
    Mr. Watt. I am stuck with you, although I can't get an 
answer out of anybody on this panel. I am just trying to get an 
answer. I am not adverse to you.
    Mr. Jimenez. The question again is----
    Mr. Watt. How does this create a level playing field, I 
guess, is the question that I started off asking, before I was 
so generously interrupted by my colleague.
    Chairman Ney. We will generously give you some overtime.
    Mr. Jimenez. The Administration feels strongly that faith-
based organizations should have the same access to HUD grants.
    Mr. Watt. As do I.
    Mr. Jimenez. Except that before this rule, faith-based 
organizations had to jump through hoops that secular 
organizations didn't have to.
    Mr. Watt. And I don't think they should either, Mr. 
Jimenez. We are on the same side of that issue.
    But the issue that we don't seem to be on the same side of 
is whether there can be discrimination in employment based on 
religion or--and, therefore, as a substitute based on race--in 
the use of Federal funds, not the--not in the pulpit.
    I am the staunchest supporter you would like to have to not 
putting a Baptist minister in a Jewish synagogue. I mean, I 
wouldn't think of anything that ridiculous, which is why the 
religious exemption is in Title VII, but it never was in Title 
VII to allow churches to deliver services that are basically 
governmental services, social services, into the community: 
Housing, after school programs.
    And for this Administration to somehow take the silence of 
Congress on that as a license to go into the community and tell 
churches that you can discriminate, is just unforgivable in my 
opinion.
    Mr. Jimenez. Sir, I think I can answer your question.
    It is not just the religious services that faith-based 
organizations provide. In 1972, Congress expanded the religious 
hiring freedom that faith-based organizations enjoy under Title 
VII. And they extended it to all employees of the faith-based 
organization, whether or not they perform inherently religious 
functions. And it was that expanded freedom that the Supreme 
Court upheld unanimously in 1987.
    I might also add that Charitable Choice has been on the 
books since 1996 and it governs----
    Mr. Watt. I am sure this is in response to a question I 
asked, Mr. Jimenez. I can't get a damn thing out of you all 
when I ask you a question, and you keep trying to give me stuff 
when I don't ask you a question. Everybody keeps trying to give 
me information when I don't ask a question. I can't get any 
answers out of anybody when I ask a question. I mean, I am 
disturbed by that.
    If this Administration would send somebody over here who 
can answer the questions and stand up for the Administration 
and say what their policy is, which is that they intend to 
encourage religious discrimination in these programs, which is 
very apparent from the three gentlemen that they sent over 
here, I think is an abomination. And I think it is going to 
backfire on you. I think it is going to backfire on you from a 
social perspective, and all of this stuff that you were doing 
in the community in advance of finalizing the regulations, 
which is just politics, trying to get into every black church 
in the country, that is going to backfire on you, too.
    I yield back. I yield the rest of my time to Mr. Renzi.
    Chairman Ney. And I will answer any question if you ask me 
one.
    Mr. Renzi. Thank you, Mr. Watt.
    Chairman Ney. Anybody else have any desire to ask a 
question?
    Mr. Watt. I don't want to beat them up. I would like to get 
some answers.
    Mr. Jimenez. I would be happy to answer a question.
    Mr. Frank. One statement.
    Mr. Jimenez mentioned the 1972 Amendments, which did extend 
the freedom from religion. But those who cite that cite, to 
quote from Sam Ervin at the time, in which he says, ``The hands 
of Caesar have no place in the institution of God.'' Well, we 
are in a situation where the hands of Caesar are carrying 
money, and it is qualitatively different. It may be right or 
wrong.
    But, in fact, to invoke Sam Ervin's quote when he said, 
``The hands of Caesar have no place in the institution of 
God,'' when we have now decided that we are going to provide 
Federal money to carry out Federal purposes to these 
institutions, it is clearly not an automatic extension.
    So I would say that the invocation of the `72 Act does not 
meet the arguments that my colleague raised. And again the very 
justification that I see, citing Sam Ervin, it is a little bit 
different, I think a lot different, because once you have 
said--it is one thing to say we are doing this to give complete 
independence in the Federal Government. It is another to say, 
well, now the Federal Government is giving us money to tell us 
how to spend it.
    Mr. Jimenez. This would not be the first time, sir.
    Mr. Frank. I am talking about the `72 Act. One thing on the 
`96, yes, that is true, that was done as part of the Welfare 
Bill. The Welfare Bill was very controversial. But it is also 
the case that when Bill Clinton signed it, he announced he was 
not going to enforce it. So it was not something that has, in 
fact, been in effect for very much time.
    Chairman Ney. Any other questions of the witness?
    I want to thank, again, the members for coming. And thank 
the witnesses for their interest and for coming here to the 
hearing today.
    [Whereupon, at 5:15 p.m., the subcommittee was adjourned.]


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