Washington, Dec. 12--(AP) President Bush is enacting by executive fiat key pieces of his divisive "faith-based initiative," including one that lets federal contractors use religious favoritism in their hiring.

Hoping to involve churches and religious organizations more deeply in government efforts to address social ills, Bush on Thursday was signing an executive order aimed at giving those groups a leg up in the competition for federal money, administration officials said. He was announcing the changes in a speech to religious and charitable leaders in Philadelphia.

The president began pushing the issue on Capitol Hill in his second week in office but ran into a fierce debate over how religious groups could get government money without running afoul of the constitutional separation of church and state. He was successful in the House but the Senate wouldn't even give him a watered-down version that mainly increased tax breaks for charitable giving.

Even with next year's total Republican control of Congress sure to create a more friendly environment, Bush decided to forge ahead on his own. By far the most contentious of the changes is Bush's executive order informing federal agencies that religious organizations refusing to hire people of any faith can still win contracts.

Additionally, new regulations being unveiled Thursday from the Department of Health and Human Services and Department of Housing and Urban Development also preserve the right of religious groups providing certain government-financed services to hire based on religion.

Broadly, Bush's directive tells federal agencies to ensure religious groups are treated equally with others in all respects, said the officials, who spoke on condition of anonymity. Federal contractors also can no longer be denied federal money for displaying religious icons, such as a cross or a menorah.

The hiring issue was one of the central disputes as lawmakers considered Bush's proposals before. Civil rights law bars discrimination on the basis of religion, but constitutional problems arise when government money is involved. Bush's aim is merely to erase barriers and give religious groups as fair a shake as any others, said Jim Towey, the director of the White House office of faith-based and community initiatives. "He doesn't want to make it a faith-favored public square but he wants it to be faith-friendly," Towey said.

Also, the executive order restates that organizations cannot use federal funds to preach a particular faith, worship or provide religious instruction.

Joe Conn, a spokesman for Americans United for Separation of Church and State, said religious groups would be allowed to discriminate in hiring while other groups could not. "It's not equal treatment," he said. "It's special treatment for religious groups. ... In essence, the government is going to be funding religious discrimination."

For his Philadelphia announcement, Bush chose a presidential-election battleground state with the fifth-largest cache of electoral votes. The visit will be Bush's 17th to Pennsylvania--the most to any state.

Behind the president's push to expand the role of churches in addressing poverty, hunger, homelessness and drug abuse is his belief that they can be more effective than other groups in helping the needy. His administration--fueled by the religious conservative constituency that forms Bush's political base--contends that religious groups face unfair barriers.

White House officials cited the examples of the Victory Center Rescue Mission in Iowa, which was threatened with losing $100,000 in federal money because its governing board wasn't secular enough, and the Metropolitan Council on Jewish Poverty in New York, told it could not apply for a federal grant because the word "Jewish" was part of its name.

In other administrative changes, the Federal Emergency Management Agency will now allow religious nonprofits such as schools and soup kitchens to get federal aid after natural disasters.

Finally, Bush was creating offices to help shepherd religious groups through the bureaucracy in two departments, Agriculture and the U.S. Agency for International Development. That brings the total number of agencies with such offices to seven.

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