"... TOWARD THE BEGINNING OF THE COURT'S string of school-secularization cases, the most eloquent language preserving the neutral study of religion was probably Justice Robert Jackson's concurring opinion in the 1948 case McCollum v. Board of Education: "One can hardly respect the system of education that would leave the student wholly ignorant of the currents of religious thought that move the world society for ... which he is being prepared," Jackson wrote, and warned that putting all references to God off limits would leave public education "in shreds." In the 1963 Schempp decision, the exemption for secular study of Scripture was explicit and in the majority opinion: "Nothing we have said here indicates that such study of the Bible or of religion, when presented objectively as part of a secular program of education, may not be effected consistently with the First Amendment," wrote Justice Tom C. Clark. Justice Arthur Goldberg contributed a helpful distinction between "the teaching of religion" (bad) and "teaching about religion" (good). Citing these and subsequent cases, Marc Stern, general counsel for the American Jewish Congress, says, "It is beyond question that it is possible to teach a course about the Bible that is constitutional." For over a decade, he says, any legal challenges to school Bible courses have focused not on the general principle but on whether the course in question was sufficiently neutral in its approach. ..."
This is an excerpt from the interior of a fairly lengthy article from the online version of Time Magazine. The author, David van Biema, has presented a balanced exposition of the issues involved as well as the worries from the right and the left about how the secular teaching of the Bible as literature would be implemented.
I suspect that many people have never read the 1963 opinion of the Supreme Court that is mentioned here, and I would have to admit that I have not read it fully myself. If you are interested, Wikipedia has a summary of Abington School District v. Schempp and if you interested in the full (and lengthy) decision you can go to Findlaw and read 374 U.S. 203 (1963).
What may be surprising is that the 1963 Supreme Court decision did NOT ban the study of the Bible in public schools. It banned school-sponsored devotional readings and prayer. I remember this personally -- it was customary to read a passage from Scripture and to recite the Lord's Prayer at the beginning of the the school day, along with the Pledge of Allegiance. I remember it from third grade, and I seem to recall it in fourth grade as well. I know that by fifth grade it was no longer a part of my school day.
The First Amendment to the Constitution of the United States makes it clear:
"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
The government cannot legally support one religion over another, but neither can the government prohibit people from the free exercise of their religion (or no religion, for that matter).
The problem was not that the Supreme Court said that schools could not sponsor prayer or devotional Bible reading; it was that subsequent practice in many areas tended to purge any whiff of religion from the public schools. My opinion is that much of this was due to more to an unwillingness to deal with controversy rather than with anti-religious ideology. Subsequent court decisions made it clear that "prohibiting the free exercise thereof" included specific rules and practices that prevented religious expression on school grounds. In other words, if you let secular groups use the property, you have to allow religious groups as well.
As for the teaching of the Bible as literature -- that was never banned by either the Constitution or the courts -- and Justice Jackson's words quoted above provide as good a reason as any I have heard for ensuring that our youth are religiously literate.