"Religious liberty is also prior to the state itself. ..."

... It is not merely a privilege that the government grants us and so may take away at will. Instead, religious liberty is inherent in our very humanity, hard-wired into each and every one of us by our Creator. Thus government has a perennial obligation to acknowledge and protect religious liberty as fundamental, no matter the moral and political trends of the moment. This insight as well is reflected in the laws and traditions of our country from its very inception. The Declaration of Independence boldly proclaimed as a self-evident truth that our inalienable rights are "endowed by our Creator"—not by the State.

Religious freedom is most commonly understood as an individual right, and it certainly is that. Religious freedom proceeds from the dignity of each person, and so protects each person individually. "[T]he exercise of religion, of its very nature, consists before all else in those internal, voluntary and free acts whereby man sets the course of his life directly toward God" (Second Vatican Council, Dignitatis Humanae, No. 3). Therefore individuals are "not to be forced to act in manner contrary to [their] conscience," nor "restrained from acting in accordance with [their] conscience." (Ibid.) Congress has shown special vigilance in protecting these individual rights of conscience, for example, in the form of the Religious Freedom Restoration Act (RFRA), which forbids the federal government from imposing any "substantial burdens" on religious exercise absent the most compelling reasons.

But religious freedom also belongs to churches and other religious institutions, comprised of citizens who are believers and who seek, not to create a theocracy, but rather to influence their culture from within. The distinction between Church and State, between God and Caesar, remains "fundamental to Christianity" (Pope Benedict XVI, Deus Caritas Est, No. 28). We look to the State not to impose religion but to guarantee religious freedom, and to promote harmony among followers of different religions. The Church has "a proper independence and is structured on the basis of her faith as a community the State must recognize" (Ibid.). An indispensable element of this independence is the right of churches "not to be hindered, either by legal measures or by administrative action on the part of government, in the selection, training, appointment, and transferral of their own ministers" (Second Vatican Council, Dignitatis Humanae, No. 4). We are grateful that federal courts in the United States—at least to date—have uniformly recognized this core protection under the Religion Clauses of the First Amendment. ...

Regrettably, now is the time for such self-correction and repair. In the recent past, the Bishops of the United States have watched with increasing alarm as this great national legacy of religious liberty, so profoundly in harmony with our own teachings, has been subject to ever more frequent assault and ever more rapid erosion.

From "Testimony of Most Reverend William E. Lori, Bishop of Bridgeport, On behalf of the United States Conference of Catholic Bishops Before the Judiciary Committee of the United States House of Representatives, Subcommittee on the Constitution (October 26, 2011)" (PDF copy of full testimony available on USCCB site).