From Daniel Dreisbach (clip):
Throughout his public career, including two terms as President, Jefferson pursued policies incompatible with the “high and impregnable” wall the modern Supreme Court has erroneously attributed to him. For example, he endorsed the use of federal funds to build churches and to support Christian missionaries working among the Indians. The absurd conclusion that countless courts and commentators would have us reach is that Jefferson routinely pursued policies that violated his own “wall of separation.”
Jefferson’s wall, as a matter of federalism, was erected between the national and state governments on matters pertaining to religion and not, more generally, between the church and all civil government. In other words, Jefferson placed the federal government on one side of his wall and state governments and churches on the other. The wall’s primary function was to delineate the constitutional jurisdictions of the national and state governments, respectively, on religious concerns, such as setting aside days in the public calendar for prayer, fasting, and thanksgiving. Evidence for this jurisdictional or structural understanding of the wall can be found in both the texts and the context of the correspondence between Jefferson and the Danbury Baptist Association.
President Jefferson had been under Federalist attack for refusing to issue executive proclamations setting aside days for national fasting and thanksgiving, and he said he wanted to explain his policy on this delicate matter. He told Attorney General Levi Lincoln that his response to the Danbury Baptists “furnishes an occasion too, which I have long wished to find, of saying why I do not proclaim fastings & thanksgivings, as my predecessors [Presidents Washington and Adams] did.” The President was eager to address this topic because his Federalist foes had demanded religious proclamations and then smeared him as an enemy of religion when he declined to issue them.
Jefferson’s refusal, as President, to set aside days in the public calendar for religious observances contrasted with his actions in Virginia where, in the late 1770s, he framed “A Bill for Appointing Days of Public Fasting and Thanksgiving” and, as governor in 1779, designated a day for “publick and solemn thanksgiving and prayer to Almighty God.”
How can Jefferson’s public record on religious proclamations in Virginia be reconciled with the stance he took as President of the United States? The answer, I believe, is found in the principle of federalism. Jefferson firmly believed that the First Amendment, with its metaphoric “wall of separation,” prohibited religious establishments by the federal government only.
Robert George further explains: