Question for Michael P.

Michael P. suggested that we read Cathy Kaveny's post, at Commonweal, on the recent speech by Sen. Obama on the faith-based initiative.  It seems to me that, at the end of the day, and despite the "Look!  He's reaching out to evangelicals!" press coverage, all that Sen. Obama has proposed is a roll-back of the more religious-organization-friendly changes that Pres. Bush made to the Clinton Administration's program.

Cathy wrote:

Senator Obama is sensitive to the facts that taxpayer money has to be dedicated to building up the political common good–the good of what St. Augustine would call the Earthly City–rather than to increasing membership of the Heavenly City (which is ultimately a matter for God’s grace) . Building up the political common good is a project in which people of good will can cooperate, no matter what their faith. So the organizational arms of faith-based groups which receive public funds won’t be allowed to discriminate, either in the provision of services or in hiring people to provide those services. Furthermore, they won’t be allowed to use the provision of services as an occasion to proselytize.

I am surprised that my colleague Cathy regards this restriction as justifiable, let alone praise-worthy.  What, exactly, is inconsistent with "building up the political common good" about permitting faith-based groups to actually be faith-based groups?  What is it about "building up the political common good" that should require faith-based groups to give up the right to hire-for-mission in order to enjoy public support for the public goods they provide?  Michael?