How New Faith-Based Bill Would Affect Local Churches ; Senate Bill Allows Charitable Deductions for Religious Groups but No Direct Federal Aid

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If a compromise between the White House and the Senate becomes law, the Ten Commandments will no longer stand between Tom Lewis and a federal grant for his after-school program.

In an agreement reached last week, religious organizations that provide social services would be eligible for federal funds even if they mention God in their mission statement, have a religious title, or display religious icons.

That means the Decalogue, which hangs on the wall of Mr. Lewis's faith-based Fishing School here, would not be an obstacle to obtaining federal support. "This is a government of the people, by the people, and for the people, and we're working for the people," says Lewis, who says he provides learning - and love - for about 120 children a year.

A year ago, President Bush stood side by side with Lewis when he launched his so-called faith-based initiative - the cornerstone of his "compassionate" agenda. Over the course of the year, however, his pledge to allow religious-based groups to compete for federal funding on equal footing with secular groups languished in the Senate.

Now, with the most controversial aspects of the legislation dropped, and with a little presidential arm-twisting of House Republicans, political observers expect the Senate compromise to make it to the president's desk.

"I doubt this is a situation where Republicans would vote against the president," says Marvin Olasky, a senior fellow at the Acton Institute for the Study of Religion and Liberty.

For all the focus on faith-based groups, however, the Senate agreement actually does little specifically for religious organizations involved in social work.

The thrust of the $12 billion bill, sponsored by Sens. Joseph Lieberman (D) of Connecticut and Rick Santorum (R) of Pennsylvania, is directed toward re-energizing charitable giving. The Senate bill would allow the 75 percent of Americans who do not itemize on their tax returns to take a deduction for donations to charities - up to $400 for individuals, $800 for couples. …