SBA expands outrageous church exemption

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Through an “interim final rule,” the Small Business Administration has just announced that recipients of $50,000 or less in taxpayer-funded forgivable loans under the Paycheck Protection Program can have their loans forgiven even if they’ve violated rules prohibiting them from firing employees or reducing wages. This change compounds an earlier, unconstitutional SBA decision to force taxpayers to fund religion through the PPP, notes the Freedom From Religion Foundation.

Crucially, this rule change applies to most small businesses that are “affiliated” with much larger businesses, including churches. The SBA waived the ordinary affiliation limits for churches, which allowed churches to receive major funding even if they were affiliated with a giant, even obscenely wealthy organization. This permitted the Catholic Church and other rich religious organizations to grab billions in taxpayer funds through the PPP even though similarly situated secular entities, such as Planned Parenthood, could not do the same.

After the new SBA rule, churches that took advantage of this lopsided rule are being given yet another benefit at taxpayer expense. Although the purpose of the PPP was to prevent small business workers from losing their jobs or facing a pay cut amid the pandemic, the SBA will now forgive church loans even if churches did not keep their end of the bargain.

“The pattern is clear,” says FFRF Co-President Dan Barker. “Opportunistic churches want to enrich themselves at the expense of struggling businesses. And the SBA is willing to sacrifice the well-being of workers’ jobs and wages — the very entities the PPP was designed to protect — to make it happen.”

As FFRF previously noted, the White House openly encouraged churches to take advantage of the taxpayer-funded PPP and even hosted secretive calls to religious leaders to help them secure more funding.

The American Founders warned against forcing taxpayers to fund religion. The Trump administration has trampled this hallowed rule. The Freedom From Religion Foundation will continue its work dedicated to keeping the government secular and educating the public about the dangers of mixing state and church.

Note: As a qualifying secular 501(c)(3) nonprofit, FFRF was eligible for and received a forgivable loan under the Paycheck Protection Program of less than half a million dollars. Unlike churches, FFRF discloses its finances to the government and the public by filing an annual Form 990 information return. Churches, which receive automatic tax exemption, are uniquely exempted by the Internal Revenue Service from filing financial disclosures, making them unaccountable black holes.

Photo via Shutterstock By Jer123

Freedom From Religion Foundation

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