Biden Administration Federal Funding Rule Change Threatens Religious Liberty

The ability of religious organizations to conduct their work in line with their doctrines has been a central point of contention in national politics for some time. A proposed rule change by the Biden Administration would downgrade regulatory respect for religious liberty, while endeavoring to heighten requirements favoring sexual orientation and gender identity (SOGI) in federal grant making beyond the Constitution and federal statutory law, and beyond the Supreme Court’s Bostock vs Clayton County decision (2020). Since many religious educational, medical, and charitable institutions receive federal grant money, the change will have a major impact on religious liberty.

The Notice of Proposed Rule Making in CFR Vol. 88, No. 192, Oct. 5, 2023, Subpart D, Post Federal Award Requirements, §200.300, removes language from subsection (a) saying that federal grants must be administered in a way “protecting free speech, religious liberty, public welfare, the environment, and prohibiting discrimination.”

All federal constitutional protections that exist nonetheless apply to the activities of the federal government. The proposed rule does say that grants must be administered “in full accordance with the U.S. Constitution.” But the proposed rule no longer specifies religious liberty, and instead says in subsection (b) that “sex” is to be interpreted to include sexual orientation and gender identity, “consistent with the Supreme Court’s reasoning in the Bostock vs. Clayton County” decision. That court decision specifically limits the federal legal requirements for sexual orientation and gender identity to employment discrimination law, and specifically respects religious liberty.

However, a new subsection (c) says that “in administering awards in accordance with the U.S. Constitution, the federal agency must take account of the heightened constitutional scrutiny that may apply under the Constitution’s Equal Protection clause for government action that provides differential treatment based on sexual orientation and gender identity.”  This goes beyond the Bostock decision and seeks a “heightened scrutiny” for sexual orientation and gender identity (SOGI) requirements. It does not say that such scrutiny does exist, only that it “may” exist, suggesting that federal officials would be wise to give priority to SOGI requirements, and the Administration will go into court if necessary and seek such priority. And since such scrutiny is sought when “administering awards in accordance with the U.S. Constitution,” there appears to be a suggestion that SOGI requirements take priority over all other constitutional requirements.

This rule change is completely unwarranted, because the Constitution specifically recognizes religious liberty as its first freedom, as well as other freedoms mentioned in the language the Biden Administration is excluding, while it says nothing about SOGI requirements, nor does any federal statute recognize SOGI requirements in anything other than marriage.

The exclusion of persons from religious organizations based on religious requirements is essential to those organizations’ religious integrity. The Administration should restore the language recognizing First Amendment freedoms, at the very least. But it should also remove subsection (b), as the Bostock decision already makes SOGI requirements part of federal employment discrimination law, and Bostock also emphasizes the importance of religious freedom. Even more importantly, it should remove subsection (c), which attempts to put SOGI requirements above all other federal funding requirements.

Comments on the proposed regulation are due by Dec. 4, 2023, and can be submitted at https://www.regulations.gov.  A comment can be submitted by typing OMB-2023-0017-0001 into the search engine provided, and should note that the submission is in response to Docket OMB-2023-2017, “Guidance for Grants and Agreements,” and reference 2 CFR 200.300, “Statutory and national policy requirements.” A comment expressing religious liberty concerns would reasonably object to removing language recognizing religious liberty and other constitutionally and statutorily recognized requirements, while introducing sexual orientation and gender identity (SOGI) requirements, which are not mentioned in the constitution at all or in federal statutes beyond marriage law. Concern would reasonably also be expressed about the attempt to extend SOGI requirements beyond the Bostock requirements and give them priority above religious liberty and other constitutional requirements. Finally, it should be noted that religious organizations benefit the public through much charitable work and must maintain their religious integrity in all their activities, as a reasonable application of the free exercise of religion requires.