Bush signs order opening 'faith-based' charity office for business

WASHINGTON (CNN) -- After devoting his first week in office to education reform, President Bush opened his second week by concentrating on more controversial issues, including his proposals to allow religious groups to receive federal funding for the provision of vital life and social services to the needy.

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The new president announced Monday morning the creation of a new White House office focused solely on helping religious or "faith-based" groups obtain federal tax dollars. The office was founded with the late-morning signing of an executive order at the White House, following Bush's morning meeting with a host of religious leaders.

The new White House Office of Faith-Based and Community Initiatives, Bush said after the meeting, will report directly to the president.

"This is one of the most important initiatives that my administration will implement," he said. "There are deep needs and real suffering in the shadow of America's affluence. We are called by conscience to respond."

The legislative portion of the president's plan -- which would allow religious groups to compete with secular organizations for federal dollars to pay for after-school programs, drug treatment counseling, meal assistance and other programs -- will be sent to Capitol Hill Tuesday, Bush said.

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The documents sent to Congress will include broader tax deductions for Americans who make regular charitable donations.

The president also signed an executive order directing five Cabinet-level federal agencies to investigate how faith-based groups could effectively participate in a variety of government aid programs.

Bush said the Justice Department, the Department of Health and Human Services, the Department of Housing and Urban Development, and the Education and Labor Departments will be charged with drawing up lists of federal regulations that stymie private groups from cooperating with the government to provide social aid.

Those regulations, he said, would then have to be rewritten or eliminated.

"We will look for greater cooperation between the government and the independent sector," Bush declared. "And we will remove regulatory barriers."

Private and faith-based charities, Bush said while surrounded by those who attended the morning meeting, will be the Bush administration's first line of defense against poverty, addiction and homelessness.

"My administration will look first to faith-based and community groups," he said. "We will not fund the religious activities of any one group, but when people of faith provide services, we will not discriminate against them."

Those in attendance Monday included representatives of Christian, Muslim and Jewish organizations.

"This is a collection of some of the finest America has to offer," Bush said. "These are people who lead with their hearts."

The new White House office will be charged with distributing billions of federal dollars to a variety of religious groups and charities over the next 10 years. In essence, the groups would be competing with a number of established organizations -- including federal agencies -- for a set amount of tax dollars.

"There are so many people in need that the federal government is not getting the job done," White House press secretary Ari Fleischer said Monday afternoon.

Bush has appointed University of Pennsylvania political science professor John J. DiIulio Jr. to head the office.

Former Indianapolis Mayor Stephen Goldsmith will chair a new advisory board -- the Corporation for National Service --, which will work hand-in-hand with Dilulio and his staff.

To build support, Bush planned to meet throughout the week with leaders of a number of spiritual and charitable groups, and he planned to attend the National Prayer Breakfast on Thursday -- a presidential tradition.

Despite the intent of the president's plans, critics said Monday that Bush's wide-ranging proposal would violate the Constitutional separation of church and state.

"For the purpose of the state and the church, and the principle of separating the two with a decent distance, this is a very bad idea," said Barry Lynn of the advocacy group Americans United for Separation of Church and State.

Bush anticipated such criticism last week, and sought to mute a number of voices whose objections will likely grow as the legislative portions of the proposal wend their way through the Congress.

Bush aides said safeguards would be in place to make sure the religious groups do not use the money to proselytize.

"This will not be funding religion," Fleischer insisted. "It is not the religious aspect of what they that is getting funding, it is the community service aspect. These are not going to be programs that preach religion, these are faith-based programs that help people improve their lives."

Aides said some faith-based groups already receive federal funding under the 1996 welfare reform law, and that these groups have not violated the constitutional separation of church and state.

Health reform in the works

Bush may also be close to unveiling his plan to give grants to states to provide prescription coverage to the poorest seniors.

The proposal is expected to be similar to the "Immediate Helping Hand" plan Bush touted during the last months of the 2000 presidential campaign. As a candidate, Bush advocated providing $48 billion over four years to pay full drug costs for seniors with incomes below 135 percent of the poverty line, which is less than $12,000 for an individual.

Bush aides said the president's plan would serve as a "bridge" until Congress passes a full Medicare overhaul bill, but Democrats said Bush's proposal may not go far enough.

"If he focuses only on low-income people, then there are a lot of middle class folks struggling to pay their prescription benefit," said Sen. Evan Bayh, D-Indiana.

CNN White House Correspondents John King and Kelly Wallace, Ian Christopher McCaleb and The Associated Press contributed to this report.