One of the biggest dangers, to my mind, is dangling this Federal money before the eyes of cash-strapped Pregnancy Aid services, the vast majority of supported by churches or, at the very least, by church people, buying them into the Washington system, and then regulating them down to nothing.
As I understand it, something like this happened in Germany (then: West Germany) starting in 1975, when they passed an amendment to their Constitution that was actually, on the face of it, pro-life, recognized the right to life of the unborn, but concluded that the most effective way to protect this right was to offer counseling, services, the usual.
Within a very short time, even Church-run counseling services were required to make referrals for abortion when that's what the client wanted.
It so deeply compromised and coopted both the Catholic and Evanglical groups, they essentially never recovered. There is practically no organized pro-life movement in Germany, or in fact in most of Europe.
The two approaches, Conservatives and Marxists, represent very fundamental differences in what is viewed as the society, the nation and the government.
To a Marxist, one cannot discuss what “the nation” or “the society” is doing, unless one is actually talking about the government, and in the American context, the federal government. To a Marxist, if the federal government is not “doing it” then the “nation” is not “living up to its responsibilities “.
But Conservatives do not equate “accomplishments” of “the nation” as either singularly, or even most importantly derived ONLY from activities funded, controlled, run by the federal government - in ALL cases, for ALL things.
To Conservatives, “the nation” is the free society of America and what the nation can accomplish, within its domestic sphere begins with localities, counties, states and regions, from every for-profit and not-for-profit sphere, and its accomplishments, in most things is manifested from those venues up, not from Washington D.C. down.
Conservatives understand that neither Washington D.C. or our state Capitals have any real money or wealth of their own. All the money they have has been sucked out of private hands from the local village on up.
Yet, Marxists, Progressives and Fascists keep getting elected on the myth that they are delivering to the village some magic money that appears out of the sky over Washington D.C. and our state Capitols. The only result is money, power and liberty are sucked out of the sphere's of life closest to us.
You can see the application of our different philosophies of “national accomplishment” in the record of American philanthropy and charitable giving. Americans, from all their private individual, corporate and non-profit foundation sources are the world's largest givers, both for domestic and international causes. Americans rate of giving on a % of GDP and per-capita basis is double that of the 2nd ranked nation, Great Britain. For foreign work alone, in one recent year, the American people, outside of government spent $49 billion. And, in demographic surveys of where Americas most consistent givers live, they are in the “red” counties and they are not rich.
This contrasts, philosophically with everything Mr. Obama has done, or supported, in the non-profit area, with outfits like Acorn, which has not been to husband peoples own resources to accomplish something, but to organize around the idea that taxes and government must be harnessed to make possible the “benevolence” they want to do.
By comparison, Habitat for Humanity has a conservative moral compass and Acorn and Obama have a Marxist compass.
The “dangling Federal money” is, as you noticed, the beginning of the end of freely chosen and independent charitable work. That same “dangling” is already increasing at some state and local levels as well. It is pernicious and insidious.
The additional “grants”, over time, add to the commitments the politicians are placing on tax revenues, which not only adds to future tax increases, to keep the “grants” up, but in doing so reduces the private money left in the economy, tending to reduce, over time, the private giving (look at Europe) not to mention the often corrupt and undeniable politicization of “giving”. To Marxists like Obama, who equate "society" with "government" its always couched in his terms - the government must do it. To Conservatives, it is not a contest between who is compassionate and who is not, but how is the best way for "society" to do something, not simply the "government". If Conservatives are going to quit letting their own compassion cause them to lose the battle that says the ends don't justify the means, now would be a good time to start.