July 1 (Bloomberg) -- Democratic presidential candidate Barack Obama said he would spend at least $500 million a year to promote community aid programs run by faith-based groups.

The proposal would expand an initiative put in place by President George W. Bush to aid religious organizations performing social service work, which Obama said ``never fully completed its mission or fulfilled its promise.''

Obama, a former community organizer in Chicago, would create a new White House office for the President's Council for Faith- Based and Neighborhood Partnerships. Among other things, the council would help train faith-based groups on how to apply for federal grants and set up a program to provide summer educational opportunities for 1 million low-income children.

``While these groups are often made up of folks who've come together around a common faith, they're usually working to help people of all faiths or of no faith at all,'' Obama said today in Zanesville, Ohio. ``Change comes not from the top down, but from the bottom up, and few are closer to the people than our churches, synagogues, temples, and mosques.''

Obama is seeking to compete with Republican John McCain for the votes of evangelical Christians. While Bush won a majority of those voters in his election campaigns, leaders of some Christian activist groups have yet to endorse McCain.

McCain has supported Bush's faith-based initiative.

Rules on Funding

Obama, 46, an Illinois senator, called for rules to ensure that the council wouldn't breach the constitutionally mandated separation of church and state. Federal money could only be spent on non-religious activities and groups couldn't discriminate when deciding who will get their aid.

Any groups receiving money would have to demonstrate the effectiveness of their programs, his campaign said.

Bush stirred controversy when he used his executive authority to establish his Faith-Based and Community Initiative without getting approval from Congress. Critics including David Kuo, who helped run the office from 2001 to 2003 and wrote a book claiming that the program was used for political gain.

``Rather than promoting the cause of all faith-based organizations, former officials in the office have described how it was used to promote partisan interests,'' Obama said. ``As a result, the smaller congregations and community groups that were supposed to be empowered ended up getting short-changed.''

Reviewing Programs

Obama said today that, if elected, he would ask his attorney general to review which of Bush's faith-related executive orders to rescind. He said his program would have a central ``mission'' in his administration. He said it's ``yet to be worked out'' whether the head of the office would be a cabinet-level position.

When asked about Obama's proposal today, White House spokesman Tony Fratto said the current faith-based initiative is important to Bush and, if Obama supports the idea of using such organizations, ``that's something we'd all be very happy about.''

In its fact sheet on the proposal, Obama's campaign didn't give a cost for the entire program, saying that the educational portion would cost about $500 million a year. That would be paid for through better management of surplus government property, reducing growth in the federal travel budget and streamlining the federal procurement process, the campaign said.

Reading Initiative

The campaign cited research showing that lower-income children tend to lose reading skills over the summer months while middle-class students gain. Poor students and minorities often end up about 2 1/2 grade levels behind their higher-income peers after years of this summer achievement gap, the campaign said.

Obama introduced his initiative today in Ohio, a state he lost to Hillary Clinton during the primary season. The last Democratic presidential candidate to win the state was Bill Clinton in 1996.

Obama asked the former president by phone yesterday to campaign with him. Today, Obama said the two didn't ``belabor'' his heated primary competition with Hillary Clinton, a New York senator and Bill Clinton's wife.

This week Obama is focusing his campaign on values including patriotism and religious faith. He is trying to win over blue- collar workers who largely supported Clinton in states such as Ohio and Pennsylvania while also confronting persistent and false rumors about his background.

McCain is heading to Colombia and Mexico where, over the next three days, he is emphasizing his commitment to free trade and talking about security and immigration.

Invoking Reagan

Before leaving for Latin America, McCain stopped in Indianapolis to address a conference of the National Sheriffs' Association. Invoking the name of former President Ronald Reagan, he promised more spending on front-line law enforcement, including efforts to fight drug trafficking.

``Funds distributed by the Department of Justice are too often earmarked according to their value to the re-election of members of Congress instead of their value to police,'' McCain told the crowd of about 2,000. ``Millions of dollars are wasted every year, and a lot of good ideas and programs in local law enforcement never get funded.''

To contact the reporters on this story: Kim Chipman with the Obama campaign in Zanesville, Ohio at +1-

kchipman@bloomerg.net; Kristin Jensen in Washington at kjensen@bloomberg.net

Last Updated: July 1, 2008 16:42 EDT