LUCKY SEVERSON, correspondent: Going into the Iraq war, U.S. military officials described the overwhelming force they intended to employ as “shock and awe.” Now it seems that same phrase could be used to describe the overall cost of that war and the one in Afghanistan and the U.S. engagement in neighboring Pakistan. It’s much greater than predicted by the government, according to a report compiled by the Watson Institute for International Studies at Brown University. It’s called the Eisenhower Research Project, codirected by Professors Catherine Lutz and Neta Crawford.

PROFESSOR NETA CRAWFORD (Political Science, Boston University): I’ve been looking at the history of war and its conduct for a long time, and what struck me about these three wars most startlingly was how much we don’t know about the costs.

PROFESSOR CATHERINE LUTZ (Anthropology and International Studies, Brown University): The reasonable estimate is approximately $4 trillion for the war, up to today and including some of the future costs that we’re obligated to pay for veterans care.

SEVERSON: That estimate includes the cost of the fighting that hasn’t ended yet, but it does not include as much as a trillion dollars just for the interest payments on the war debt through 2020. That’s a unique aspect of these wars.

CRAWFORD: Every other war the US has fought historically has been paid for by revenue, either by raising taxes or selling war bonds. In this war, the United States has almost entirely financed it, paid for it by borrowing.

LUTZ: What surprised me most was this idea that wars have such a long tail into the future of negative effects that we pay environmentally, we pay in human suffering, we pay in financially decades into the future.

President George W. Bush in 2003: “My fellow Americans, major combat operations in Iraq have ended. In the battle of Iraq, the United States and our allies have prevailed.”

SEVERSON: Originally, the Bush Administration projected the Iraq war would be short and cost approximately $60 billion, clearly off the mark, but historically not unusual.

LUTZ: Governments often try to sell wars to the public and they use, at best, a very, very conservative estimate that will seem the most attractive and reasonable to the public. There tends to be an assumption that force will work, and therefore the job will be done in a couple of weeks or a month.

CRAWFORD: That doesn’t usually happen. In fact, it hardly ever happens. You have to really destroy a country to get people to roll over, and in every instance, the duration of war is almost always underestimated.

SEVERSON: To date, more than 6,000 U.S. troops have come home in coffins, although until recently images of the solemn event at Dover Air Force Base have been forbidden. Less well known is the fact that more than 26,000 allied military and security forces, most of them Iraqi or Afghan, have also been killed.

LUTZ: A lot of the information about the war is not available to the American public. For a variety of reasons, the idea that you want to have a sanitized version of the war available for purposes of morale, for the public at large, for the troops.

SEVERSON: Hundreds of aid workers have been killed, others kidnapped. Twenty-three hundred U.S. contractors have died. But what we rarely hear about are the numbers of civilian deaths, and they are considerably greater than military casualties.

CRAWFORD: In Iraq, it’s been about 125,000 people killed, civilians killed. In Afghanistan, the conflict has killed directly about 12,000 to 14,000 civilians.

SEVERSON: The hostilities In Pakistan have actually taken more lives than the war in Afghanistan—about 35,000, including civilians and militants. There, the U.S. military relies increasingly on drone attacks. The cost of this operation is classified.

CRAWFORD: These strikes have killed about 2,000 people. We don’t know exactly how many, and we don’t know exactly how many of those people were insurgent targets. Now this is a secret war, but it’s an open secret.

SEVERSON: Another war statistic is the number of wounded. Among U.S. servicemen alone that number is nearly 100,000, and the wounds are often severe.

LUTZ: This war differs from previous wars in a number of ways, and so there are certain kind of injuries and severity of injury that we did not see in previous wars. Survival rates are higher because of battlefield medicine and other factors.

SEVERSON: The insurgents’ use of IEDs or improvised explosive devices has been a major cause of injuries.

LUTZ: So we have a lot more injuries that are, again, whole body impact rather than just a single bullet kind of injuries, and these kinds of traumatic brain injuries that have such long-term negative effects and often interact with some of the other problems, the PTSD and other injuries that have this major effect on the person.

SEVERSON: It’s the hidden costs or unquantifiable costs of war that keep popping up in the Watson Institute report, which was compiled by 20 academics from around the country—the cost, for instance, to our civil liberties. The report says there has been unprecedented surveillance of American behavior and phone conversations that have been allowed through the Patriot Act, which was enacted to fight terrorism at home.

LUTZ: It is common to wars in general that they have often expanded the power of the government beyond what they were, what those powers were in peacetime, and that those powers are often maintained past the end of the conflict, and so in line with the idea that wars are never over when we think they’re over, that’s one way in which that statement’s true.

SEVERSON: Then there’s the image of the U.S., which has suffered globally, first after the torture pictures from Abu Ghraib, then the reports of the secret prisons and the detention of hundreds of terror suspects at Guantanamo, many of whom were released after several years.

CRAWFORD: It’s tarnished the image of the United States as a country of the rule of law.

LUTZ: For the people of Iraq and Afghanistan, this has been a nightmare decade.

SEVERSON: The report says the psychological effects for the people of Iraq, Afghanistan, and Pakistan have been “massive”—depression, post traumatic stress disorder, broken families, targeted victims and collateral damage of a counterinsurgency war.

LUTZ: The number of refugees from these wars have been estimated by the UN at 7.8 million persons in those three countries—Iraq, Afghanistan, and Pakistan. And that’s equivalent to the population of Connecticut and Kentucky being forced from their homes.

SEVERSON: The environmental harm is difficult to calculate but significant: damage from spilt fuel, spent munitions, toxic dust, increased rates of respiratory and cardiovascular disease, which is also showing up in returning troops.

SEVERSON: The report also takes into account what the wars have accomplished—the overthrow of Saddam Hussein, the killing of Osama bin Laden, the diminished ability of the Taliban, greater rights for women in Afghanistan, the spread of democracy, although Iraq and Afghanistan are listed as two of the world’s most corrupt countries. But like the costs, it will be impossible to measure the benefits until well into the future, and it’s the future that concerns the authors of this report.

LUTZ: The data is out there, but it’s very difficult to access. In some cases it’s not there at all. We need to know what those data are for past conflicts in order to try and project forward to other conflicts. That’s how a democratic society should operate is with full information about what public policy decisions are being made and who’s being asked to pay what. These have been costs that have also been born very unevenly, so the people who are paying the costs, military families, veterans, civilians in Iraq, Afghanistan and Pakistan—those people deserve to have their story told.

SEVERSON: Benjamin Franklin is quoted as having said, “Wars are not paid for in wartime. The bill comes later.” The Watson Institute report says the bills for these wars will keep coming in for as long as 40 years later.

For Religion & Ethics Newsweekly, this is Lucky Severson in Washington.

BOB ABERNETHY, host and correspondent: We have a report today on the moral choices involved in the intense negotiations underway in Washington over what to do about the country’s $14.3 trillion debt. If the debt ceiling is not raised by August 2, in just one month, the Treasury Department says for the first time in American history the government will not have enough money to meet all its obligations. The Administration wants Congress to raise the debt ceiling so the government can borrow more to pay those bills. But many members of Congress say they want, first, a believable long-term plan to reduce the deficit. So far, there’s no agreement on such a plan, so the debt limit remains, and so does the countdown to default.

All over Washington, from Congress to the White House, among the K Street lobbies, at the think tanks, and at scores of conferences and panels, experts are trying to solve the problem. One experienced voice has been that of retired Republican Senator Alan Simpson of Wyoming. He was the co-chair of last year’s special presidential commission on the debt.

ALAN SIMPSON: If we don’t get a plan out of this by August 2, then hang on tight.

ABERNETHY: And “hang on tight” implies what?

SIMPSON: Implies inflation. It implies the people who are going to loan us money want more interest for it. It will be a different lifestyle for Americans, and inflation will eat through the system, and the little guy will be the guys most hammered.

ALICE RIVLIN: If we don’t raise the debt limit, we would probably have a crash in the markets, and it would be very serious.

ABERNETHY: Brookings Institution economist Alice Rivlin headed the budget offices at both Congress and the White House.

RIVLIN: I think we are talking about a moral issue. We do not want to leave our children and our grandchildren with a worse economy and a much harder life than we are enjoying.

ABERNETHY: There’s no mystery about the cause of the debt problem. As the number of older Americans has gone up, so have the costs of the so-called entitlements—Medicare, Medicaid, and Social Security. New medical technology drives up health care costs, and two wars have gone unpaid for. It’s estimated that the war in Afghanistan is costing nearly $120 billion dollars this year.

RIVLIN: To borrow without limit and without thinking how we are going to pay this back seems to me stupid and immoral.

ABERNETHY: For Simpson, there is also the problem of selfishness.

SIMPSON: Well, don’t blame it all on Congress. Blame it on the American people who sent people to Washington to bring home the bacon. And the way you got re-elected was you just went and got it for them, and now the pig is dead. There is no more bacon to bring home.

ABERNETHY: Solving the debt problem is not only an economic and political challenge. The crisis raises basic philosophical and moral questions about the kind of government and society Americans want. Last April, the conservative majority in the House of Representatives passed a budget for next year proposed by the chair of its budget committee, Paul Ryan. He outlined his plan to the American Enterprise Institute.

PAUL RYAN: This budget begins by lowering taxes, with the top individual and corporate tax rate capped at 25 percent, so we can get real growth and economic competition in America.

ABERNETHY: And then…

RYAN: …it cuts $6.2 trillion in spending from the president’s budget over just the next 10 years. It is not just a budget, it is a cause…

ABERNETHY: …the conservative cause of reducing the size of government. Michael Gerson, a former White House speech writer, is a columnist for the Washington Post.

MICHAEL GERSON: I think it is fair to say that conservatives are not just interested in a balanced budget. They want a limited government which is, you know, a smaller government, a less expansive government. That’s really a conservative argument here, that too much government undermines the independence and responsibility of citizens.

ABERNETHY: The Ryan budget drew sharp criticism from many in the religious communities, among them former congressman and ambassador Tony Hall.

TONY HALL: We need to get our fiscal house in order, but not on the backs of the poor and hungry. They didn’t get us into this current mess, and hurting them is not the way out of it.

ABERNETHY: Jim Wallis is the editor of Sojourners magazine.

JIM WALLIS: Those of us who are Christians are bound by Jesus’ command to protect the least of these the most, the most, so we ask what would Jesus cut?

ABERNETHY: The two chairmen of the Catholic bishops committees on domestic and international justice wrote Congress expressing their “serious concern.” So did 75 scholars, most of them at the Catholic University of America. Sister Simone Campbell, executive director of the Catholic social justice lobby Network, says she and others oppose the House budget because it doesn’t seem to reflect Catholic social teaching.

SISTER SIMONE CAMPBELL: The essence of Catholic social teaching is that it is based on the dignity of the human person, that we all hold dignity because we are created by God, that together in society we hold shared responsibility for each other. Government’s role then becomes to ensure that the least are cared for. That’s why it’s so chilling to us to watch what’s going on in Congress about the budget. It’s the very safety net programs that the current budget fight is targeting, and to me this is wrong. It, quite frankly, is immoral.

ABERNETHY: Congressman Ryan, too, is Catholic. He agrees that the poor and sick should not be hurt, but he insists the way to avoid that is to keep taxes low so private investors can create new jobs.

CAMPBELL: That’s just wrong. The wealthy have recovered to pre-recession levels. Are they investing in jobs? No.

ABERNETHY: And what about leaving massive debt to our children?

CAMPBELL: I think it’s not a good idea. But there is a simple fix. You can solve this issue in a very simple way. Raise revenue.

ABERNETHY: Not something easy to do. As the moral debate sharpened, Ryan wrote a letter to the president of the Catholic Bishops Conference, New York Archbishop Timothy Dolan, insisting that his budget does indeed respect Catholic social teaching. The archbishop replied that he was happy to hear that. In the midst of the arguments, there was a brief diversion over the ideas of Ayn Rand, the late atheist writer and philosopher whose book, The Fountainhead, and a movie based on it, were popular in the 1950s. Rand preached a radical, small government, everyone-for-himself libertarianism which some congressmen, among them Paul Ryan, said they had admired. A liberal blogger tried to discredit them with a film contrasting Rand’s selfish individualism with the teachings of Jesus.

In spite of all the claims and charges, many observers do see middle ground.

SIMPSON: You can’t tax your way out of this baby, and you can’t cut spending as your way out of this baby. It has to be a blend.

ABERNETHY: But all the moral debate has not made compromise easy.

GERSON: I think moral motivations in politics are very important. But when you claim that your own views somehow have a divine sanction, you’ve cut off all political argument. This should be an argument about outcomes, what is really best for the justice and decency of a society. I think a limited government is important to that, and I think a government that provides some of the most basic needs for the most vulnerable people in society is important to that as well. That’s where a lot of Americans are.

ABERNETHY: Alan Simpson thinks his former colleagues will head off a national crisis and that their constituents will accept the need for sacrifice.

SIMPSON: I think there are a lot more heroes in Congress than we recognize.

ABERNETHY: Gerson and Rivlin say they, too, are at least somewhat optimistic.

GERSON: You are going to have to have Republican and Democratic leaders come together around this. They’re very dug in, but there is no other choice.

RIVLIN: There will be a lot of posturing and a lot of difficulty, but we will raise the debt ceiling, and over the next several years we will bring our debt under control.

ABERNETHY: Alice Rivlin was the director of the budget offices at both Congress and the White House. She served on two budget commissions. She says last year there were unofficial focus groups in 26 cities that were asked to work on the debt problem. When they heard the facts, Rivlin says, each of them was able to work out a plan. Not all of them came up with the same solution, but no one failed to reach agreement on something. It seems to be quite different for Congress and the White House, raising the question whether the federal government can compromise and act on an issue as difficult as this one, with so much moral passion and partisan ideology.

More on this with our managing editor Kim Lawton. Kim?

KIM LAWTON: Bob, the religious community continues to be very involved in this debate, bringing some of that moral passion, and they are lobbying on both sides or all sides of this issue. This week we had 24 religious and charitable organizations writing a letter to the Administration and congressional leaders saying in all of your debt ceiling discussions don’t forgot about the poor, the vulnerable, the least of these, what they called them. And on the other side you had religious conservatives lobbying Congress, saying don’t accept any debt ceiling solution that doesn’t include dramatic spending cuts, and they also used moral language, saying it’s wrong to leave debt to our children, using a biblical passage to support that. So, again, energy on all sides on this moral question.

ABERNETHY: That’s right, and morally and ideologically it spills over into the whole idea of a smaller government, which of course is what the conservatives want very much.

LAWTON: And that’s a big issue on the campaign trail, too, which is really heightening all of the political rhetoric on Capitol Hill out on the campaign trail. So many of the GOP candidates are out there really appealing to the conservative base, talking about these issues. Michele Bachmann, the new GOP candidate, who is an evangelical Christian, very much reaching out to her base saying I’m not going to support, I’m not going to vote for any debt ceiling measure that doesn’t include dramatic spending [cuts]. And of course, you know, religious conservatives are so important for the GOP during this period because about forty percent of Republican primary voters are self-identified evangelicals, so everybody’s sort of reaching out to them, seeing it as a big stepping stone.

ABERNETHY: Do they have any favorites so far?

LAWTON: They seem to be pretty divided still. Michele Bachmann polled very well in Iowa this week, which surprised a lot of people. She’s very popular among those very conservative religious groups. But there are disagreements among evangelicals. Some take a more moderate point of view. Evangelical leaders in a recent poll liked Tim Pawlenty, Minnesota governor, but he’s not as well known nationally, so there still seems to be a lot of room for jockeying among evangelicals.

ABERNETHY: Meanwhile, there’s the whole issue of fourteen million people who can’t find jobs.

LAWTON: And that’s the big issue that’s really dominating everything, and people are jockeying for a solution, and no one seems to have a good solution. So, indeed, that’s really been overshadowing so many of the other issues that you often hear about early in a campaign, and that’s what you see the candidates talking about, and obviously that’s what you see members of Congress wrestling over with the Administration as well.

ABERNETHY: Kim Lawton, many thanks.

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KIM LAWTON: Faith-based groups stepped up lobbying efforts as Congress continues to battle over potential budget cuts. Religious conservatives maintain that addressing the government’s massive debt is a moral issue. Meanwhile, a diverse interfaith coalition urged members of Congress to consider how cuts would hurt poor people in the US and around the world. As part of that effort, several prominent Christian leaders launched a new ad campaign asking “what would Jesus cut?”

Joining me with more on this is Kevin Eckstrom, editor of Religion News Service. Kevin, there’s been a huge mobilization, it seems, from many quarters of the religious community on these budget issues.

KEVIN ECKSTROM (Editor, Religion News Service): Right and you’re seeing it from both the left and the right. From the left, the more progressive side, you see traditional lobbying to keep programs like home heating assistance and school lunches and aid for, you know, women and children, sort of your bread and butter domestic issues. On the right, you’re seeing a lot of action to try to protect the international development assistance, money to buy mosquito nets to prevent malaria and to fight AIDS in Africa, and food for the hungry and refugees and things like that. So you’ve got various groups lobbying for various issues, each hoping that their preferred pot makes the cut.

LAWTON: And a lot of those folks, both on the left and the right, are using moral language and scriptural language, saying, you know, the Bible urges people to care, look out for the vulnerable, the widows, the orphans, and the least of these, and so you are seeing this sort of biblical language.

Watch evangelical author and activist Jim Wallis on budget cuts, debt, deficits, and economic priorities

ECKSTROM: Right, and it’s biblical language on both sides. The more traditional churches, Catholic bishops and your mainline churches and your Jewish groups are saying, you know, we have a biblical and ethical, moral obligation to care for people who can’t help themselves. On the other side, from the more conservative side, especially from the Tea Party, you have arguments saying that it’s actually immoral to leave debt to future generations. And they sometimes chafe at the notion of, you know, what would Jesus cut? They say, well, Jesus didn’t have opinions on this, you know, that it’s up to us to sort of make the decisions on what to cut. But you get various moral arguments from both sides, and we’re just waiting to see who wins the day.

LAWTON: Well, I was at the National Religious Broadcasters Convention this week, and one of their keynote speakers was House Speaker John Boehner, Catholic, who used a lot of biblical language in his speech. He had a very receptive, mostly evangelical audience, and he quoted Scripture. He quoted from Proverbs, “A good man leaves behind an inheritance to his children’s children,” and he said Republicans want to not just be hearers of the word, but doers of the word, another scriptural reference there. And, you know, I found that very interesting, that you had the congressional leadership on the right also trying to seize the biblical and moral language on all of this.

ECKSTROM: Yeah, and it’s going on on both sides in sort of different directions, even I think one of the more interesting splits has been within the evangelical community, where you have sort of small-government evangelicals who want to cut, you know—we need to balance the budget, we can’t have this debt. And then you have another portion of the evangelicals who say, well, we can—government can do good things, and government can make a difference in parts of the world where we have interests, and it’s not just moral interests, it’s strategic interests, and so let’s protect the programs that actually work. Let’s not cut from AIDS funding, for example, which President Bush poured a lot of money into. So you get this interesting divide within especially the conservative religious community over their political loyalties and sort of their religious underpinnings.

LAWTON: And some of those moral arguments I’ve been hearing—I’m sorry, the pragmatic arguments I’ve been hearing, in additional to the moral ones, are that it’s in America’s national security, that folks around the world who have food and a decent job and a place to live and have a good, stable social situation are less likely to be recruited by terrorists. Or they also just say America’s reputation as well. I know when I was in Sri Lanka after the tsunami and the US poured in so much help, or Haiti—US poured in so much help. That really want a long way to improving America’s image around the world.

ECKSTROM: Right, I mean, you’ve been to all these places, you can see the difference that it makes when you’ve got these bags of rice that come in with the American flag on it and people look at that and they see us as a good country. But there are sort of national security arguments to be made and think they are fairly effective, that people who are fed, who have good schools, and who don’t have to worry about what they are going to eat that night are less likely to be recruited into extremism.

LAWTON: And we’ll both be watching in the weeks to come. Thank you, Kevin.

ECKSTROM: Thanks.

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Originally broadcast June 19, 2009

SAUL GONZALEZ: At the recent Worship Facilities Conference and Expo held in Long Beach, California, the business of marketing to places of worship was on full display. At this twice-a-year national convention, companies try to sell their products and services to churches and religious institutions.

UNIDENTIFIED SALES REPRESENTATIVE #1 (speaking to conference attendee): Maybe two cameras to cover the minister and the choir?

GONZALEZ: Their wares range from sophisticated video production gear to pews for churches and synagogues.

UNIDENTIFIED SALES REPRESENTATIVE #2: This is the Cadillac. This is our theater seat, a completely wooden theater seat.

GONZALEZ: Banks and credit unions that specialize in lending and financial consulting to houses of worship also attended.

UNIDENTIFIED BANK SALES REPRESENTATIVE (speaking to conference attendee): We don’t necessarily go by loan to value. We’re looking at cash flow.

GONZALEZ: Although there was plenty of hustle and bustle on the convention floor this year, the recession cast a pall over this expo.

STEVE KROH (Architect): In 25 years, it’s never hit us this hard before.

GONZALEZ: Steve Kroh is an architect whose firm specializes in church design. With congregations cutting back on expansion and new construction plans, Kroh is seeing his business plummet.

Mr. KROH: We’re not having to lay off a lot of people yet, but we’re cutting back on hours and just trying to hang in there right now. We are taking a lot smaller projects than we used to just to keep everybody busy.

ERIC KNOWLES (Founder and CEO, Church Brokers, San Diego, CA): The recession is hitting everybody, and it’s affecting churches just as much as it is the mom and pop homeowner.

GONZALEZ: Eric Knowles is the founder and CEO of Church Brokers, a San Diego firm that specializes in church real estate and financing.

Mr. KNOWLES: Right now, most of the churches we’ve been working with, probably the past year or least, they are all pulling the reins in. They’re not spending anything outside of the hard fast debt they have to pay. Salaries are getting cut back. People are getting let go. A lot of churches are letting their staff go or reducing their pay, going to part time. So it’s a challenging time for churches right now.

GONZALEZ: One house of worship struggling to keep its doors open in the down economy is Long Beach’s Immanuel Church, which is part of the United Church of Christ.

Reverend JANE STORMONT GALLOWAY (Pastor, Immanuel Church, Long Beach, CA): Foreclosure is a possibility and something that we are concerned about.

GONZALEZ: And to those out there who think of churches as being foreclosure-proof?

Rev. GALLOWAY: Oh, no. Forget it.

GONZALEZ: With revenues down, Reverend Jane Galloway’s church is struggling to pay off a more than $850,000 mortgage and loans used to pay for repairs of this more than 80-year-old building.

Rev. GALLOWAY (speaking at meeting): Talking with the mortgage — our mortgage broker. . .

GONZALEZ: To stay afloat the church has cut expenses, and Reverend Galloway has volunteered to slash most of her own pay. But despite the belt tightening, every bill that arrives brings a new challenge.

Rev. GALLOWAY: I mean we’re literally at a point where my husband walked in the other day and said this was on the side door, and it was a turn-off notice for the utilities. Now we are at a scary moment, and we know that each month, if we are unable to make our mortgage payment on time, we could be — the default process can be filed and a foreclosure proceeding could begin.

GONZALEZ: Although no single, hard number exists, banks and credit unions that lend to houses of worship report a steady increase in church bankruptcies and foreclosures. One of them is this 1,000-seat church north of San Diego. Built just in 2005, it closed last year after the church defaulted on loans. Even wealthy and powerful megachurches, such as southern California’s Crystal Cathedral, have had to cut staff and put millions of dollars worth of property up for sale to help pay off debts. Whether they’re big or small, many churches’ money troubles stem from s steady decline in giving. According to the Christian research company the Barna Group, American churches got between $3 and $5 billion less in donations than they expected to receive during the last quarter of 2008. That’s about a four to six percent decline.

Reverend PHIL HERRINGTON (Pastor, Pathways Community Church, Santee, CA, addressing congregation: I thank you to so many of you who have given faithfully using this envelope. It really helps us pay the bills and do what we do as a ministry — in helping people and loving God and loving people.

GONZALEZ: Phil Herrington is pastor of Pathways Community Church in Santee, California.

Rev. HARRINGTON: We have a number of people in our church right now that are unemployed, that have lost jobs. People who used to be significant donors in the church have just flat out lost their income. Maybe they can give in a smaller way, but that affects our overall income.

GONZALEZ: In response, Pathways has had to cut staff and fill more positions with volunteers. Houses of worship that face foreclosure and other financial troubles often get into their predicaments for the same reasons that homeowners and consumers do: borrowing and spending too much money when times are good and not being prepared when the economy goes from boom to bust.

Mr. KNOWLES: You know, churches are no different than, literally, business owners or homeowners. We all believed that everything was going continue to appreciate, that there was no turning of the curve, and so everybody was overleveraging, and churches are no different. They were not exempt.

GONZALEZ: Real estate broker Eric Knowles, a devout evangelical Christian, says churches’ financial problems are sometimes made worse by leaders who are unable to face harsh economic realities.

Mr. KNOWLES: There’s that faith, you know, that often we think that the Lord is directing us to go do something. Well, how do you refute that when I deal with a pastor that says that the Lord is calling me to buy this building? And I have many situations where it will not pencil. We run our analysis and we get real involved and detailed. But then the pastors continue to say, well, I believe God is directing me for this. Goodness. So what do you do? What do you do? We give the best counsel we can. We give it to them pragmatically, you know, documented in writing that this is where you are going to be, and often time the pastor will look me in the face and say, well, you know what? I understand what you are saying. I understand by earthly standards this will not work, but God has called me to do it. And that’s the trump card. What do you do? You’re just kind of like, okay.

GONZALEZ: In both good economic times and bad, some churches are supplementing what goes into collection baskets by finding new and creative ways to raise income. For instance, with assistance from investors Pathways Community Church purchased this once dilapidated shopping mall. The church occupies the space that was once a supermarket but rents out the rest of the center to other businesses. The revenue earned helps the church pay operating expenses and mortgage payments that total over $21,000 a month.

Rev. HARRINGTON: Right now it’s helping us survive. If we didn’t have that right now we would have to massively downsize staff and personnel and do a lot less ministry out in the community than we are doing right now. So it has opened up a lot of doors for us.

Rev. GALLOWAY (speaking at meeting): I think it could be shared space, perhaps like a collective office space . . .

GONZALEZ: But as they try to guide their churches through turbulent economic times, the strain is taking a visible toll on some religious leaders such as Reverend Galloway.

Rev. GALLOWAY: I really want this to work, and I feel a sense of responsibility. I’ll let myself be this vulnerable because you are asking me this. I feel a sense of responsibility to the people I am here for. People come here with broken hearts. People come here looking for food — looking for spiritual food, and I hear the kind of despair they are in, and I realize that it’s crazy for me to be this preoccupied with the finances of some place, when I’m here to create a place where people can come and find solace. So I feel a sense of responsibility to the people who come here for that kind of nurturance.

UNIDENTIFIED SALES REPRESENTATIVE #3: We’ve developed what we call our McDonald’s approach to church design. It’s our “church in a box.”

GONZALEZ: At the expo, those attending hoped the recession would soon end, allowing houses of worship to focus not on their money problems, but on their ministries.

For RELIGION & ETHICS NEWSWEEKLY, I’m Saul Gonzalez in Long Beach, California.

FRED DE SAM LAZARO (guest anchor): For many people struggling through these hard economic times, the church has been a place to find solace and — for some — a food shelf. However, when it comes to paying the light bill, the phone bill, and the mortgage, some churches are finding themselves as hard-pressed as their congregants. While charitable giving to churches actually went up overall in 2008, many worship communities have been forced to lay off employees. Some even face the threat of foreclosure. Saul Gonzalez has this report from Southern California.

SAUL GONZALEZ: At the recent worship facilities conference and expo held in Long Beach, California, the business of marketing to places of worship was on full display. At this twice-a-year national convention, companies try to sell their products and services to churches and religious institutions.

UNIDENTIFIED SALES REPRESENTATIVE #1 (speaking to conference attendee): Maybe two cameras to cover the minister and the choir?

GONZALEZ: Their wares range from sophisticated video production gear to pews for churches and synagogues.

UNIDENTIFIED SALES REPRESENTATIVE #2: This is the Cadillac. This is our theater seat, a completely wooden theater seat.

GONZALEZ: Banks and credit unions that specialize in lending and financial consulting to houses of worship also attended.

UNIDENTIFIED BANK SALES REPRESENTATIVE (speaking to conference attendee): We don’t necessarily go by loan to value. We’re looking at cash flow.

GONZALEZ: Although there was plenty of hustle and bustle on the convention floor this year, the recession cast a pall over this expo.

STEVE KROH (Architect): In 25 years, it’s never hit us this hard before.

GONZALEZ: Steve Kroh is an architect whose firm specializes in church design. With congregations cutting back on expansion and new construction plans, Kroh is seeing his business plummet.

Mr. KROH: We’re not having to lay off a lot of people yet, but we’re cutting back on hours and just trying to hang in there right now. We are taking a lot smaller projects than we used to just to keep everybody busy.

ERIC KNOWLES (Founder and CEO, Church Brokers, San Diego, CA): The recession is hitting everybody, and it’s affecting churches just as much as it is the mom and pop homeowner.

GONZALEZ: Eric Knowles is the founder and CEO of Church Brokers, a San Diego firm that specializes in church real estate and financing.

Mr. KNOWLES: Right now, most of the churches we’ve been working with, probably the past year or least, they are all pulling the reins in. They’re not spending anything outside of the hard fast debt they have to pay. Salaries are getting cut back. People are getting let go. A lot of churches are letting their staff go or reducing their pay, going to part time. So it’s a challenging time for churches right now.

GONZALEZ: One house of worship struggling to keep its doors open in the down economy is Long Beach’s Immanuel Church, which is part of the United Church of Christ.

Reverend JANE STORMONT GALLOWAY (Pastor, Immanuel Church, Long Beach, CA): Foreclosure is a possibility and something that we are concerned about.

GONZALEZ: And to those out there who think of churches as being foreclosure-proof?

Rev. GALLOWAY: Oh, no. Forget it.

GONZALEZ: With revenues down, Reverend Jane Galloway’s church is struggling to pay off a more than $850,000 mortgage and loans used to pay for repairs of this more than 80-year-old building.

Rev. GALLOWAY (speaking at meeting): Talking with the mortgage — our mortgage broker. . .

GONZALEZ: To stay afloat the church has cut expenses, and Reverend Galloway has volunteered to slash most of her own pay.  But despite the belt tightening, every bill that arrives brings a new challenge.

Rev. GALLOWAY: I mean we’re literally at a point where my husband walked in the other day and said this was on the side door, and it was a turn-off notice for the utilities. Now we are at a scary moment, and we know that each month, if we are unable to make our mortgage payment on time, we could be — the default process can be filed and a foreclosure proceeding could begin.

GONZALEZ: Although no single, hard number exists, banks and credit unions that lend to houses of worship report a steady increase in church bankruptcies and foreclosures. One of them is this 1,000-seat church north of San Diego. Built just in 2005, it closed last year after the church defaulted on loans. Even wealthy and powerful megachurches, such as southern California’s Crystal Cathedral, have had to cut staff and put millions of dollars worth of property up for sale to help pay off debts. Whether they’re big or small, many churches’ money troubles stem from s steady decline in giving. According to the Christian research company the Barna Group, American churches got between $3 and $5 billion less in donations than they expected to receive during the last quarter of 2008. That’s about a four to six percent decline.

Reverend PHIL HERRINGTON (Pastor, Pathways Community Church, Santee, CA, addressing congregation:  I thank you to so many of you who have given faithfully using this envelope.  It really helps us pay the bills and do what we do as a ministry — in helping people and loving God and loving people.

GONZALEZ: Phil Herrington is pastor of Pathways Community Church in Santee, California.

Rev. HARRINGTON: We have a number of people in our church right now that are unemployed, that have lost jobs. People who used to be significant donors in the church have just flat out lost their income. Maybe they can give in a smaller way, but that affects our overall income.

GONZALEZ: In response, Pathways has had to cut staff and fill more positions with volunteers. Houses of worship that face foreclosure and other financial troubles often get into their predicaments for the same reasons that homeowners and consumers do: borrowing and spending too much money when times are good and not being prepared when the economy goes from boom to bust.

Mr. KNOWLES: You know, churches are no different than, literally, business owners or homeowners. We all believed that everything was going continue to appreciate, that there was no turning of the curve, and so everybody was overleveraging, and churches are no different. They were not exempt.

GONZALEZ: Real estate broker Eric Knowles, a devout evangelical Christian, says churches’ financial problems are sometimes made worse by leaders who are unable to face harsh economic realities.

Mr. KNOWLES: There’s that faith, you know, that often we think that the Lord is directing us to go do something. Well, how do you refute that when I deal with a pastor that says that the Lord is calling me to buy this building? And I have many situations where it will not pencil. We run our analysis and we get real involved and detailed.  But then the pastors continue to say, well, I believe God is directing me for this. Goodness. So what do you do? What do you do? We give the best counsel we can. We give it to them pragmatically, you know, documented in writing that this is where you are going to be, and often time the pastor will look me in the face and say, well, you know what? I understand what you are saying. I understand by earthly standards this will not work, but God has called me to do it. And that’s the trump card. What do you do? You’re just kind of like, okay.

GONZALEZ: In both good economic times and bad, some churches are supplementing what goes into collection baskets by finding new and creative ways to raise income.  For instance, with assistance from investors Pathways Community Church purchased this once dilapidated shopping mall. The church occupies the space that was once a supermarket but rents out the rest of the center to other businesses. The revenue earned helps the church pay operating expenses and mortgage payments that total over $21,000 a month.

Rev. HARRINGTON: Right now it’s helping us survive. If we didn’t have that right now we would have to massively downsize staff and personnel and do a lot less ministry out in the community than we are doing right now. So it has opened up a lot of doors for us.

Rev. GALLOWAY (speaking at meeting):  I think it could be shared space, perhaps like a collective office space . . .

GONZALEZ: But as they try to guide their churches through turbulent economic times, the strain is taking a visible toll on some religious leaders such as Reverend Galloway.

Rev. GALLOWAY: I really want this to work, and I feel a sense of responsibility. I’ll let myself be this vulnerable because you are asking me this. I feel a sense of responsibility to the people I am here for. People come here with broken hearts. People come here looking for food — looking for spiritual food, and I hear the kind of despair they are in, and I realize that it’s crazy for me to be this preoccupied with the finances of some place, when I’m here to create a place where people can come and find solace. So I feel a sense of responsibility to the people who come here for that kind of nurturance.

UNIDENTIFIED SALES REPRESENTATIVE #3:  We’ve developed what we call our McDonald’s approach to church design.  It’s our “church in a box.”

GONZALEZ: At the expo, those attending hoped the recession would soon end, allowing houses of worship to focus not on their money problems, but on their ministries.

For RELIGION & ETHICS NEWSWEEKLY, I’m Saul Gonzalez in Long Beach, California.