In Towey's view, the new rule could easily be abused.
"If you're a faith-based group, you're now wondering is it worth partnering with the government and having these handcuffs on."
"Faith-based groups knew where the lines and boundaries were. But there wasn't bureaucratic red tape," Towey added.
Brian W. Walsh, a religious freedom advocate who is the president of Civil Rights Research Center, was more positive about the rule.
He told CNA that the new regulations "reaffirm a large majority of the even-handed standards for faith-based partnerships that were established by both the Clinton and second Bush administrations."
"The rules help prevent federal agency demands that faith-based partners deny their religious identity simply because they are using federal grants to care for the needy," he said. "Partners need not, for example, purge their facilities of all religious symbols."
The rules also protect faith-based organizations' rights to hire staff who adhere to their religion.
However, Walsh noted that federal rules already allow a needy person with federal benefits support to choose a service provider.
"It is therefore questionable why the rules open the door for a recipient to pick and choose which portions of a faith-based provider's program he does not want to participate in," he said.
Stanley Carlson-Thies of the Institutional Religious Freedom Alliance said the rule was positive, though he saw cause for concern in the rule's new regulations for programs that receive indirect funding.
In an April 4 commentary at the Institutional Religious Freedom Alliance, he said that previous regulations forbade religious discrimination against beneficiaries. The new rule expands this regulation to programs that receive indirect funding, such as a federal voucher for a job training program.
If any parts of such a program are framed and taught from a specifically religious perspective, a beneficiary must be allowed to opt out of these portions even if they are considered integral to the program.
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Carlson-Thies, who served at the White House Office of Faith Based & Community Initiatives from 2001-2002, also served on a task force under President Obama to draft recommendations on how to clarify church-state rules and federal funding.
The new rule becomes effective 30 days after April 4, while recipients of federal funding have 90 days after April 4 to comply. The rule is intended to implement a Nov. 17, 2010 executive order from Obama.
That executive order explicitly allowed groups that receive federal funding to display religious iconography in their facilities, maintain religious references in the names of their programs, choose board members on the basis of their religion, and make reference to faith in their mission statements and internal documents.
CNA sought comment from Catholic Charities USA, which was not able to comment as it was in the process of reviewing the regulations and their impact on its agencies.