Americans United for Separation of Church and State describes this quite well so I am just going to quote from them.
Right now, lawmakers are in the final stages of negotiations on the
must-pass National Defense Authorization Act, a bill that sets defense
policy. One of the final sticking points is a provision called the
Russell Amendment, which authorizes taxpayer-funded discrimination. The
provision would require that all federal agencies allow religiously
affiliated contractors and grantees to discriminate in employment on the
basis of religion when using taxpayer money. This sweeping amendment
extends well beyond the Defense Department and defense-related contracts
and grants.
Under the Russell Amendment, a faith-based
organization could take taxpayer money to provide social services—like
run the local homeless shelter or work with at-risk youth—and then only
hire people who belong to the organization’s denomination or profess the
same beliefs. Yet, no one should be disqualified from a
taxpayer-funded job for being the “wrong” religion. This could
jeopardize many federal laws and policies that protect against hiring
discrimination on the basis of religion, sex, pregnancy, sexual
orientation and gender identity, and more, including President Obama’s
landmark 2014 Executive Order protecting LGBT workers.
I will add that Obama's veto might not be possible because the National Defense Authorization Act is a must enact proposition.
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