On Tuesday, a council committee voted down an amendment that would protect individuals from legal retribution should they decline services for same-sex marriage based on religious beliefs.
That vote now leaves the Catholic Church and individuals open to lawsuits should they, for instance, refuse an adoption to a same-sex couple or close a church to a same-sex wedding. They would be "at risk for adhering to the teachings of their faith."
"All we're asking to do is to have a religious exemption like other states do that's broad enough to provide protection for religious rights for organizations and individuals in the District of Columbia," said Catholic Archdiocese of Washington spokeswoman Susan Gibbs.
If it doesn't get the broader exemption, the church will stop offering more than $10 million in homeless and other social service programs it runs for D.C.
At-large Councilman Phil Mendelson, whose committee voted down the amendment to broaden the language of the gay marriage bill, said what the church is suggesting is discrimination.
"It's one thing to speak of one's belief it is another to speak on practice, and here is the issue of practicing discrimination outside of a church," he said.
The gay marriage bill is expected to pass the council next month, and Mayor Adrian Fenty has said he would sign it. Congress would then have 30 days to review and overturn it.