The establishment clause has generally been interpreted to prohibit 1) the establishment of a national religion by Congress, or 2) the preference of one religion over another or the support of a religious idea with no identifiable secular purpose. The first approach is called the "separationist" or "no aid" interpretation, while the second approach is called the "non-preferentialist" or "accommodationist" interpretation. In separationist interpretation, the clause prohibits Congress from aiding religion in any way even if such aid is made without regard to denomination. The accommodationist interpretation prohibits Congress from preferring one religion over another, but does not prohibit the government's entry into religious domain to make accommodations in order to achieve the purposes of the Free Exercise Clause.
The clause itself was seen as a reaction to the Church of England, established as the official church of England and some of the colonies, during the colonial era.
Prior to the enactment of the Fourteenth Amendment to the United States Constitution in 1868, the Supreme Court generally held that the substantive protections of the Bill of Rights did not apply to state governments. Subsequently, under the Incorporation doctrine the Bill of Rights have been broadly applied to limit state and local government as well. For example, in the Board of Education of Kiryas Joel Village School District v. Grumet (1994), the majority of the court joined Justice David Souter's opinion, which stated that "government should not prefer one religion to another, or religion to irreligion."
The Supreme Court first considered the question of financial assistance to religious organizations in Bradfield v. Roberts (1899). The federal government had funded a hospital operated by a Roman Catholic institution. In that case, the Court ruled that the funding was to a secular organization—the hospital—and was therefore permissible.
In the twentieth century, the Supreme Court more closely scrutinized government activity involving religious institutions. In Everson v. Board of Education (1947), the Supreme Court upheld a New Jersey statute funding student transportation to schools, whether parochial or not. Justice Hugo Black held, Despite these stringent requirements, the New Jersey law was upheld, for it applied "to all its citizens without regard to their religious belief."
The Jefferson quotation cited in Black's opinion is from a Jefferson letter to Neremiah Dodge and others Jefferson wrote in 1802 to the Baptists of Danbury, Connecticut, that the establishment clause erected "a wall of separation between church and state." Critics of Black's reasoning (most notably, former Chief Justice William H. Rehnquist) have argued that the majority of states did have "official" churches at the time of the First Amendment's adoption and that James Madison, not Jefferson, was the principal drafter. However, Madison himself often wrote of "total separation of the church from the state" (1819 letter to Robert Walsh), "perfect separation between the ecclesiastical and civil matters" (1822 letter to Livingston), "line of separation between the rights of religion and the civil authority... entire abstinence of the government" (1832 letter Rev. Adams), and "practical distinction between Religion and Civil Government as essential to the purity of both, and as guaranteed by the Constitution of the United States" (1811 letter to Baptist Churches).
In Lemon v. Kurtzman (1971), the Supreme Court ruled that government may not "excessively entangle" with religion. The case involved two state laws: one permitting the state to "purchase" services in secular fields from religious schools, and the other permitting the state to pay a percentage of the salaries of private school teachers, including teachers in religious institutions. The Supreme Court found that the government was "excessively entangled" with religion, and invalidated the statutes in question. The excessive entanglement test, together with the secular purpose and primary effect tests thereafter became known as the Lemon test, which judges have often used to test the constitutionality of a statute on establishment clause grounds.
The Supreme Court decided Committee for Public Education & Religious Liberty v. Nyquist and Sloan v. Lemon in 1973. In both cases, states—New York and Pennsylvania—had enacted laws whereby public tax revenues would be paid to low-income parents so as to permit them to send students to private schools. It was held that in both cases, the state unconstitutionally provided aid to religious organizations. The ruling was partially reversed in Mueller v. Allen (1983). There, the Court upheld a Minnesota statute permitting the use of tax revenues to reimburse parents of students. The Court noted that the Minnesota statute granted such aid to parents of all students, whether they attended public or private schools.
While the Court has prevented states from directly funding parochial schools, it has not stopped them from aiding religious colleges and universities. In Tilton v. Richardson (1971), the Court permitted the use of public funds for the construction of facilities in religious institutions of higher learning. It was found that there was no "excessive entanglement" since the buildings were themselves not religious, unlike teachers in parochial schools, and because the aid came in the form of a one-time grant, rather than continuous assistance. One of the largest recent controversies over the amendment centered on school vouchers—government aid for students to attend private and predominantly religious schools. The Supreme Court, in Zelman v. Simmons-Harris (2002), upheld the constitutionality of private school vouchers, turning away an Establishment Clause challenge.
Further important decisions came in the 1960s, during the Warren Court era. One of the Court's most controversial decisions came in Engel v. Vitale in 1962. The case involved the mandatory daily recitation by public school officials of a prayer written by the New York Board of Regents, which read "Almighty God, we acknowledge our dependence upon Thee, and we beg Thy blessings upon us, our parents, our teachers and our Country". The Supreme Court deemed it unconstitutional and struck it down, with Justice Black writing "it is no part of the official business of government to compose official prayers for any group of American people to recite as part of a religious program carried out by the Government." The reading of the Lord's Prayer or of the Bible in the classroom of a public school by the teacher was ruled unconstitutional in 1963. The ruling did not apply to parochial or private schools in general. The decision has been met with both criticism and praise. Many social conservatives are critical of the court's reasoning, including the late Chief Justice William H. Rehnquist. Conversely, the ACLU and other civil libertarian groups hailed the court's decision.
In Abington Township v. Schempp (1963), the case involving the mandatory reading of the Lord's Prayer in class, the Supreme Court introduced the "secular purpose" and "primary effect" tests, which were to be used to determine compatibility with the establishment clause. Essentially, the law in question must have a valid secular purpose, and its primary effect must not be to promote or inhibit a particular religion. Since the law requiring the recital of the Lord's Prayer violated these tests, it was struck down. The "excessive entanglement" test was added in Lemon v. Kurtzman (vide supra).
In Wallace v. Jaffree (1985), the Supreme Court struck down an Alabama law whereby students in public schools would observe daily a period of silence for the purpose of private prayer. The Court did not, however, find that the moment of silence was itself unconstitutional. Rather, it ruled that Alabama lawmakers had passed the statute solely to advance religion, thereby violating the secular purpose test.
The 1990s were marked by controversies surrounding religion's role in public affairs. In Lee v. Weisman (1992), the Supreme Court ruled unconstitutional the offering of prayers by religious officials before voluntarily attended ceremonies such as graduation. Thus, the Court established that the state could not conduct religious exercises at public occasions even if attendance was not strictly compulsory. In Santa Fe Independent School Dist. v. Doe (2000), the Court ruled that even a vote of the student body could not authorize student-led prayer prior to school events.
In 2002, controversy centered on a ruling by the Court of Appeals for the Ninth Circuit in Newdow v. United States Congress (2002), which struck down a California law providing for the recitation of the Pledge of Allegiance (which includes the phrase "under God") in classrooms. Each House of Congress passed resolutions reaffirming their support for the pledge; the Senate vote was 99–0 and the House vote was 416–3. The Supreme Court heard arguments on the case, but did not rule on the merits, instead reversing the Ninth Circuit's decision on standing grounds.
The inclusion of religious symbols in public holiday displays came before the Supreme Court in Lynch v. Donnelly (1984), and again in Allegheny County v. Greater Pittsburgh ACLU (1989). In the former case, the Court upheld the public display of a crèche, ruling that any benefit to religion was "indirect, remote, and incidental." In Allegheny County, however, the Court struck down a crèche display, which occupied a prominent position in the county courthouse and bore the words Gloria in Excelsis Deo, the words sung by the angels at the Nativity (Luke 2:14 in the Latin Vulgate translation). At the same time, the Allegheny County Court upheld the display of a nearby menorah, which appeared along with a Christmas tree and a sign saluting liberty, reasoning that "the combined display of the tree, the sign, and the menorah...simply recognizes that both Christmas and Hanukkah are part of the same winter-holiday season, which has attained a secular status in our society."
A recent controversy surrounded Roy Moore, former Chief Justice of Alabama. Moore had in 2001 installed a monument to the Ten Commandments in the state judicial building. In 2003, he was ordered in the case of Glassroth v. Moore by a federal judge to remove the monument, but he refused to comply, ultimately leading to his removal from office. The Supreme Court refused to hear the case, allowing the lower court's decision to stand.
On 2 March 2005, the Supreme Court heard arguments for two cases involving religious displays, Van Orden v. Perry and McCreary County v. ACLU of Kentucky. These were the first cases directly dealing with display of the Ten Commandments the Court had heard since Stone v. Graham (1980). These cases were decided on 27 June 2005. In Van Orden, the Court upheld, by a 5-4 vote, the legality of a Ten Commandments display at the Texas state capitol due to the monument's "secular purpose." In McCreary County, however, the Court ruled 5-4 that displays of the Ten Commandments in several Kentucky county courthouses were illegal because they were not clearly integrated with a secular display, and thus were considered to have a religious purpose.
It is worth noting that among the eighteen influential lawgivers depicted in the north and south friezes of the Supreme Court building are two religious figures: Moses and Muhammad. Moses is depicted holding the Ten Commandments, commandments six through ten partially visible in Hebrew; Mohammad is depicted holding the Qur'an, the primary source of Islamic Law. The Supreme Court building depicts religious imagery in similar contexts in other places as well, including two additional sets of tablets representing the Ten Commandments.
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