How sincere is the Bush regime about promoting church-based alternatives to the welfare state? I guess the question is open for debate. There are two main positions.
The first position, more or less the one I subscribe to, is that the Bush regime is quite serious about his faith-based initiatives, but that its first priority is to destroy state-run programs for the poor. This is the first priority, because destroying the welfare states is a necessary priori condition to getting people to back faith-based initiatives. That is, the Bush regimes believes that the state is "crowding out" private sector initiatives, and the only way to drive the poor back into the arms of the church is to make state-funded programs unavailable. In this view, it's a matter of political sequencing, and the disillusioned complaints of faith-based program directors like David Kuo (original article here) or John DiIulio (of "Mayberry Machiavelli" fame) are simply expressions of impatience.
The other position, advocated most clearly by the likes of Thomas Frank, is that the Bush regime uses all the faith-based stuff essentially as a ruse to rally the benighted Christians to support a program which has as the sum total of its ambition to cut taxes for the rich. From this perspective, all the rhetoric about replacing government-run programs with faith-based initiatives is cynical guff, aimed at duping stupid Christians into voting for a party that consistently promotes policies that undercut their material interests. In Frank's view, Kuo's stated hope that when Bush "became the president, there was every reason to believe he'd be not only pro-life and pro-family, as conservatives tended to be, but also pro-poor" just shows what a sucker Kuo and all the rest of Bush's Christian supporters are.
Frank's position may, of course, be the correct one. However, I am not convinced. It's hugely unlikely that one would ever find a smoking gun to support his perspective, of course. But in absence of such a smoking gun, I have a general tendency to be suspicious about what therefore amounts to a conspiracy theory.
A reconciled position is that since both the wealthy backers and the fundamentalist rank and file of the Republican Party agree on cutting taxes and destroying the state social sector, Bush is willing to spend political capital to promote this part of the initiative, but that Bush is unwilling to spend political capital on promoting the faith-based initiatives part, which has less wide backing within the Party. This what DiIulio was complaining about when he claimed that "politics trumps policy" every time in this White House. Such a position has the advantage of not assuming that the Bushies are intentionally using their faith-based blah-blah to deceive stupid Christians. After all, Bush's inattention to promoting the interests of the poor does not prove that he is acting in, ahem, bad faith when he speaks of faith-based intiatives. Rather, it just goes to show what we've always known about Republicans: most of them don't actively want to make the lives of the poor worse so much as they just don't give a damn about the problems of the poor.
Whatever one makes of this debate, the net result is that what the Bush regime is actually doing is to undercut programs for the poor, without promoting any alternative whatsoever. The whole thing reminds me of this funny clip from Mel Brooks's "History of the World, Part I."