ACLU Warning Clarification - Bush State Religion

I received a concern that the ACLU warning was vague, so I reproduce the offending section below, which specifically allows religious organizations who receive federal funding to discriminate on the basis of "particular religion" (while, schizophrenically and significantly, it requries them not to discriminate on other bases). The bold in the quotes are mine, for readability.

Now, which religion's organizations receive or are likely to receive funding under the legislation, I wonder? Do we think it will be the Church of Wicca? The various Druidic orders? Might, perhaps Christian organizations be more likely?

I personally feel this is aimed at Islam, not paganism, but the sword cuts any way it wants. It is (1) repressive; (2) inappropriate in a "democratic" society; (3) clearly shows the Bush administration's willingness to fight a domestic religious battle with the tools of government, to go along with what many see as his religious war abroad, and thus (4) is a violation of separation of church and state, and thus unconstitutional.

SEC. 127. NONDISCRIMINATION.

Section 188(a)(2) (29 U.S.C. 2931(a)(2)) is amended to read as
follows:
``(2) Prohibition of discrimination regarding
participation, benefits, and employment.--
``(A) In general.--Except as provided in
subparagraph (B), no individual shall be excluded from
participation in, denied the benefits of, subjected to
discrimination under, or denied employment in the
administration of or in connection with any such
program or activity because of race, color, religion,
sex, (except as otherwise permitted under title IX of
the Education Amendments of 1972), national origin,
age, disability, or political affiliation.
``(B) Exemption for religious organizations.--
Subparagraph (A) shall not apply to a recipient of
financial assistance under this title that is a
religious corporation, association, educational
institution, or society, with respect to the employment
of individuals of a particular religion to perform work
connected with the carrying on by such corporation,
association, educational institution, or society of its
activities Such recipients shall comply with the other
requirements contained in subparagraph (A).''.