Members of Congress also criticized Andres Serrano's work Piss Christ, a photograph of a crucifix submerged in urine.

The Amendment became §954(d)(1), which directs the NEA chairperson to judge the artistic merit of grant applications while also "tak[ing] into consideration general standards of decency and respect for the diverse beliefs and values of the American public".

Defendants argued that: (1) the NEA's funding decisions are unreviewable because they are committed to agency discretion by law; (2) venue was improper as to the Privacy Act claim; and (3) plaintiffs lacked standing to challenge the facial validity of the "decency clause" because they cannot establish the necessary injury.

Instead, the court ruled that the clause represents criteria to determine eligibility for NEA grants and that an overbroad statute would restrict protected and unprotected speech.

The court also argued that in certain protected areas, such as public education funding, government grants "may not be used to suppress unpopular expression".

Although the statute does not state how much weight the Advisory Commission should give these factors, the NEA has wide discretion in considering this provision.

Also, the Court held that Finley carried the burden of demonstrating that there is a substantial risk that the application of the decency clause will lead to the suppression of speech.

From the outset, the NEA had argued that it could discharge this obligation simply by ensuring that the membership on the review panels reflected national diversity.

Like the lower courts, Justice Souter's dissent disposed of this reading as inconsistent with the text and legislative history, as well as redundant because another statutory provision already required the chairperson to consider diversity in selecting the panels.

O'Connor wrote, "when Congress has in fact intended to affirmatively constrain the NEA's grant-making authority, it has done so in no uncertain terms"—for example, the prohibition against awarding grants for obscene works.

From the conclusion that "consideration" is not equivalent to prohibition, the Court reasoned that the factors to be taken into consideration—"decency" and "respect" for diverse beliefs and values—are not intended to "disallow any particular viewpoints".