It surprised me to learn that a law governing such cases was passed so recently. The law in question is called the Johnson Amendment. "Johnson" was none other than Lyndon B. Johnson, then a Democratic floor leader in the U.S. Senate. Most accounts of the measure that I found on-line are ideologically hostile; they agree that Johnson pushed the measure as a political ploy because Texas preachers were denouncing his re-election campaign from their pulpits. Opponents hope that legal challenges that may arise from Pulpit Freedom Sunday will result in the Johnson Amendment being deemed unconstitutional. The Alliance Defense Fund argues that the IRS, which Johnson empowered to make the determination, shouldn't have the right to strip churches of tax-exemption because they're too "political." They argue that preachers routinely commented on elections and other political topics without controversy up to that time, and they're probably right about that.
Here's a point-counterpoint article featuring an enemy of the Johnson Amendment and a well-known "wall of separation" advocate. The latter makes an effective argument that preaches have not been excluded from political activity by the law -- witness the actions of everyone from Jerry Falwell to Jeremiah Wright. He claims that a line is crossed when preachers explicitly endorse candidates from the pulpit, and I understand his concern. The real reason to discourage that sort of thing, apart from Lyndon Johnson's allegedly petty motives, is to prevent voter intimidation. No voter should go to the polls believing that he or she will have less standing with the local congregation by voting against the will of the pastor. Since the present opponents of the Johnson Amendment baldly claim the right to apply so-called biblical standards to political candidates, we can assume that their endorsements or negatives will have the force of religious imperatives, the implicit assumption being that you won't be a good Xian if you vote for so-and-so. The rights of conscience aren't the issue here; the real issue is abuse of power, so striking at tax-exempt status strikes me as a fair way to hit offender where they live. That being said, I encourage the Alliance Defense Fund in their venture in the hope that it will prove an educational experience for all Americans, and I hope they lose.
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As far as I could tell, Robert Caro, the most critical and complete biographer of Lyndon Johnson, has nothing to say about the "Johnson Amendment" in his massive volume on LBJ's years as "Master of the Senate." He disposes of Johnson's 1954 re-election campaign in one paragraph, noting that his only challenger was a crackpot. I don't mean to suggest that the amendment is falsely attributed to Johnson, just that his definitive biographer must have considered it no big thing.
I half-expected to learn, given the date, that the Johnson Amendment was a product of the McCarthy era, intended to prevent preachers from espousing "social gospel" style dogma in favor of Democrats or parties further left. That doesn't seem to have been a factor for Johnson, but that's hard to verify since the amendment advanced without any debate on its motives or merits. Some writers have noticed, however, that Johnson's proposal followed fairly closely on the findings of an entity called the Cox Committee, which was constituted in 1952 to investigate whether Communists or "Communist front" groups had infiltrated the sort of tax-exempt foundations, both religious and secular, that Johnson later cracked down on. From what I could learn, the committee found no evidence of infiltration, but noted that the tax-exempts were vulnerable. To the extent that these findings were well publicized, they may have provided a pretext for the Johnson Amendment, but given the stealthy manner in which Johnson pushed the measure, it's hard to tell whether any senator even consciously endorsed the idea. That might be reason enough to have the matter brought before the public and the Supreme Court today -- so that we'd all get a chance to take a stand on the subject.
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