Should Churches Get COVID Bailout Money?

Should Churches Get COVID Bailout Money? July 22, 2020

As the coronavirus pandemic exploded across the U.S., Congress passed the CARES Act, a $2.2 trillion stimulus meant to cushion the damage of economic shutdowns. $669 billion of that money went to the Paycheck Protection Program, which offered loans to businesses and nonprofits to cover payroll costs and other expenses. If the companies that took PPP loans don’t lay off workers, the loan doesn’t have to be paid back.

Perhaps surprisingly, the nonprofits that were eligible for the PPP included churches. Should they have been allowed to participate? The Freedom from Religion Foundation says no:

The Freedom From Religion Foundation condemns the unconstitutional, possibly corrupt handout of taxpayer funds to churches, including churches run by some of President Trump’s closest allies, under the Paycheck Protection Program. New data released by the Small Business Administration on the program’s forgivable loans shows that more than 12,400 American churches took in billions of taxpayer dollars (while some were helping to spread the pandemic).

Trump’s Evangelical Advisory Board reaped substantial benefits. The First Baptist Church, run by Robert Jeffress, a vocal supporter of Trump’s Christian Nationalist policies, took in between $2 million and $5 million. Other members of the board fed at the government trough, many also receiving $2 million-$5 million, including: Jack Graham (Prestonwood Christian Academy); David Jeremiah (Shadow Mountain Community Church); Greg Laurie (Harvest Christian Fellowship), and Tom Mullins (Christ Fellowship Church). Still others connected to the board obtained smaller amounts, such as Paula White (City of Destiny), whose church received at least $150,000.

I’m going to be a contrarian: I don’t think it’s inherently problematic for churches to get PPP funding.

The Paycheck Protection Program was intended as a one-time response to an extraordinary crisis. To stop the virus from spreading out of control, we had to order businesses to shut down and people to stay home. The PPP bailout was the cushion that prevented people from going hungry or homeless while the economy was shut down. It was supposed to let us avoid huge job losses and economic destruction while we got the pandemic under control. (Of course, Trump’s malicious incompetence allowed the virus to rage out of control and all but ensured we’ll have huge job losses anyway, but that’s beside the point.)

I don’t see an obvious reason to exclude churches from this reasoning. They employ people who need money to live just like everyone else – and not just preachers, but musicians, teachers, secretaries, janitors, bookkeepers, all the people needed to run any large organization. And, just like for-profit businesses, many churches have seen their donations fall off a cliff, making it impossible for them to pay their workers themselves.

The PPP bailout was a kind of safety net, and safety nets have to catch everyone to be effective. Making church employees eligible for this one doesn’t strike me as any different than making them eligible for unemployment insurance or food stamps.

As the Christian Post pointed out, some secular groups took PPP funds as well. And there’s nothing wrong with that! Again, that’s what this money was for: to keep people from being laid off and to allow businesses and non-profits to keep the lights on.

That’s not to say that there are no problems with how the PPP money was dispensed. Here’s an example of potentially unconstitutional favoritism: the funds were supposed to be reserved for organizations with 500 or fewer employees, but the Trump administration granted religious groups an exemption to that rule. The Catholic church took advantage of this to gobble up at least $1.4 billion in PPP money, including some dioceses that were in bankruptcy because of lawsuits over child-abuse coverups:

Without this preferential treatment, many Catholic dioceses would have been ineligible because, between their head offices, parishes and other affiliates, their employees exceed the 500-person cap…

Perhaps nothing illustrates the church’s aggressive pursuit of funds better than four dioceses that sued the federal government to receive loans, even though they entered bankruptcy proceedings due to mounting clergy sex-abuse claims. Small Business Administration rules prohibit loans to applicants in bankruptcy.

The Archdiocese of Santa Fe, New Mexico — once home to a now-closed and notorious treatment center for predator priests — prevailed in court, clearing the way for its administrative offices to receive nearly $1 million. It accused the SBA of overreaching by blocking bankruptcy applications when Congress didn’t spell that out.

If churches got a special exemption from the 500-person limit that wasn’t available to others, or they used the bailout money to pay off their legal bills (or, say, to buy the pastor a new private jet) rather than paying their employees’ salaries, then those cases do pose a constitutional problem. There’s no hope of meaningful oversight under the Trump administration, but if Democrats take power in November, it might be possible to claw some of it back.

Regardless, I don’t think it’s necessarily bad to include churches in a one-time emergency program crafted in response to circumstances that are unlikely to recur. What would be constitutionally problematic would be if PPP became a long-term stream of regular cash infusions which would prop up churches that couldn’t sustain themselves otherwise. The point of the program was to be a temporary lifeline for otherwise healthy institutions, not to keep bankrupt religious organizations afloat that would otherwise have gone under even if there wasn’t a pandemic.

However, there’s one organization which absolutely shouldn’t have taken COVID bailout money and which ought to be richly mocked for doing so. That’s the Ayn Rand Institute:

The institute promoting the “laissez-faire capitalism” of writer Ayn Rand, who in the novels “Atlas Shrugged” and “The Fountainhead” introduced her philosophy of “objectivism” to millions of readers, was approved for a Paycheck Protection Program (PPP) loan of up to $1 million, according to data released Monday by the Trump administration.

The Ayn Rand Institute: The Center for the Advancement of Objectivism in Santa Ana, California, sought to preserve 35 jobs with the PPP funding, according to the data.

Even Reuters notes dryly:

In a 1962 essay, Rand wrote of seventeenth century French businessmen: “They knew that government ‘help’ to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.”

ARI wrote an apologetic for their actions, explaining that this seemingly gross hypocrisy is actually in line with the teachings of their messiah founder. And they’re not wrong – because Rand wrote, no joke, that it’s permissible to take money from government social programs, if and only if you believe such programs shouldn’t exist. This seems to be how she rationalized signing up for Social Security and Medicare:

The recipient of a public scholarship is morally justified only so long as he regards it as restitution and opposes all forms of welfare statism. Those who advocate public scholarships have no right to them; those who oppose them have. If this sounds like a paradox, the fault lies in the moral contradictions of welfare statism, not in its victims.

…the advocates and supporters of the welfare state are morally guilty of robbing their opponents, and the fact that the robbery is legalized makes it morally worse, not better. The victims do not have to add self-inflicted martyrdom to the injury done to them by others; they do not have to let the looters profit doubly, by letting them distribute the money exclusively to the parasites who clamored for it. Whenever the welfare-state laws offer them some small restitution, the victims should take it. (source)

This sounds like an early version of right-wing “bleeding the beast” ideology: the idea that conservatives should take as much money from the government as they can get, in a bid to make the whole system unsustainable and accelerate its collapse.

But this doesn’t mean ARI is free of hypocrisy; it just means that its founder was equally guilty of hypocrisy. Rand held that any government program which redistributes money from one person to another was morally indistinguishable from robbery. If that’s the case, then taking cash from such a program isn’t deserved restitution, it’s compounding the evil by accepting money taken from other victims! By her reasoning, if your property is stolen from you in a robbery, it’s permissible to go out and rob someone else to make yourself whole.

The one difference in this case is that the cash for the PPP program doesn’t come from taxation; it’s ex nihilo money-printing by the Federal Reserve. But Ayn Rand was just as opposed to that. In Atlas Shrugged, she wrote that fiat money is a “counterfeit pile of paper” and that printing it on demand “kills all objective standards”. It’s blatant inconsistency for an Objectivist to accept a government handout of this counterfeit money, which they didn’t earn with their own two hands and the sweat of their brow.

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