A three-judge panel of the 7th Circuit Court of Appeals on Friday reinstated the lawsuit brought by the Freedom From Religion Foundation that claims Bush's program violates the separation of church and state. The program helps religious groups get government funding to provide social services.

Bush sidestepped Congress by issuing executive orders to create the White House Office of Faith-Based and Community Initiatives and similar centers in 10 federal agencies during his first term. He said the goal was to help religious and community groups compete for federal funding to fight poverty, substance abuse and other social problems.