Thursday's announcement marked Obama's first official step in redesigning the White House faith-based office, created by Bush to help direct federal dollars to religious charities and social service organizations.
Religious groups such as Catholic Charities and Salvation Army have long received government money, but the faith-based office was intended to direct federal help to smaller churches and organizations.
Critics said the Bush initiative was used largely as a tool to court influential pastors and award grants in politically important states.
The hiring issue was a major point of controversy between Bush and Democrats. The president signed an executive order in 2002 that paved the way for allowing federal grants to certain groups that hired only people of like-minded religions. Supporters of the policy argued that a small Christian organization, for example, could not operate according to its ideals if it were forced to hire non-Christians.
Obama clearly singled out the policy during a campaign speech in July, declaring that "if you get a federal grant, you can't use that grant money to proselytize to the people you help and you can't discriminate against them -- or against the people you hire -- on the basis of their religion."
But once he won the election, religious conservatives began lobbying Obama and his transition team on the issue. It was the subject of intense internal debate, according to participants.
That debate is now expected to continue among the members of the new advisory council, which includes a broad range of political and religious ideologies.
Along with Page of the Southern Baptist Convention, another top conservative voice in favor of the existing policy is Richard Stearns, president of World Vision, a Christian service organization based in Washington state.
Joshua DuBois, the faith-based director named Thursday by Obama, declined to say whether the new administration would ultimately rescind Bush's executive order.
"I'd like to let that run its course and let the president make a decision based on the recommendations we make to him," said DuBois, who led religious outreach efforts for Obama's campaign.
One council member, the Rev. Jim Wallis, head of the liberal evangelical group Sojourners and a supporter of the Bush policy, said the faith leaders were told Thursday that "there would not be significant changes in the near term. This would be done slowly over time with the partners at the table."
But critics said that Obama erred in not revoking the Bush policy right away.
"To be silent on this is deeply disappointing," said the Rev. Barry W. Lynn, head of Americans United for Separation of Church and State.
And some pointed to the irony that the first black president was keeping in place a policy that seemed to embrace discrimination.
Scott, who called top White House officials this week to try to persuade them not to back off the campaign promise, said the issue carried "racial implications" because "most churches are either 100% white or 100% black."
"If you allow religious discrimination, then racial discrimination is essentially unenforceable," Scott said.
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peter.wallsten@latimes.com
duke.helfand@latimes.com
