Virtually unnoticed by the press, President Obama issued an Executive Order in November establishing criteria for federal agency funding of social services provided by religious organizations. Executive Order 13559 modified Executive Order 13279, the much criticized 2002 order issued by President Bush. The new order made no changes to policies established by President Bush on the issue of religious bias in hiring by faith-based charities that receive federal funds.
Under both the Bush and Obama orders, religious organizations receiving public funds are allowed to discriminate on the basis of religion in their employment policies. Also under both orders, funding recipients are prohibited from discriminating against beneficiaries on the basis of religious affiliation or belief or the refusal to hold a belief or to attend services.
Under Title VII, religious organizations have long had the same kind of exemption allowing them to discriminate based on religion in their hiring and firing decisions. However, the Bush and now the Obama executive orders have extended that exemption to include organizations that are supported with government funds.
The Obama order did add provisions requiring federal agencies to provide alternatives for people who do not want to receive social services from religious groups and to list recipient organizations on agency web sites.