There is a legitimate separation of Church and State. The Church cannot decide that there are 51 states instead of 50, nor can the State decide that there are 8 sacraments instead of 7. The mission of each is distinct, and as the Second Vatican Council teaches, "Christ did not bequeath to the Church a mission in the political, economic, or social order: the purpose he assigned to it was a religious one" (GS 42).
At the same time, the missions do overlap. "…At all times and in all places, the Church should have the true freedom to teach the faith, to proclaim its teaching about society, to carry out its task among men without hindrance, and to pass moral judgment even in matters relating to politics, whenever the fundamental rights of man or the salvation of souls requires it" (GS 76; cited in Living the Gospel of Life, US Bishops, 1998, n.18).
This "true freedom" corresponds well to the vision of religious liberty on which America rests. The First Amendment forbids Congress from establishing a religion, or hindering its free exercise. The Supreme Court has often indicated that debate on public issues should be unhindered, robust, and wide-open.
Yet the Church is not as free as it might be in commenting on politics, because of regulations which the IRS places on tax-exempt organizations. These regulations prohibit political advocacy. Yes, we may address issues; no, we may not participate or intervene, directly or indirectly, in any political campaign on behalf of, or in opposition to, any candidate for public office.
And the problem is that what this means, in practice, isn't always so clear. The IRS takes a "facts and circumstances" approach to determining what constitutes a violation. In other words, a pastor may find out he is in violation only after the fact. This makes many pastors over-cautious.
The ban on political speech was inserted by Senator Lyndon Johnson as a floor amendment during debate on the 1954 Internal Revenue Code, order to silence certain organizations that were opposing him. Not a single hearing took place nor was any congressional record developed to explain the reasons for the ban. There is no legislative history to clarify its meaning. Nor is there any indication that Senator Johnson intended to target houses of worship.
A bill has been introduced in Congress that may remedy this problem. HR 235, the Houses of Worship Free Speech Restoration Act, is simple straightforward legislation that will give back to churches the freedom to speak however they feel led to speak, whether the issue is construed as political or not. It amends section 501 of the IRS Code to say that Churches cannot be punished for political intervention "because of the content, preparation, or presentation of any homily, sermon, teaching, dialectic, or other presentation made during religious services or gatherings."
It makes sense to me. Religious leaders should have the right to speak from their heart, without fear of governmental stipulations.