The Catholic Church teaches that salvation is entirely by grace through faith, but that genuine saving faith necessarily produces works. Faith without works is dead (James 2:26). Works do not earn salvation but are the evidence and fruit of living faith.
For it is by grace you have been saved, through faith, and this is not from yourselves, it is the gift of God, not by works, so that no one can boast. This clearly excludes works from salvation.
Romans 4:5 says God justifies the ungodly who trust in him, apart from works. Abraham was justified by faith before circumcision.
You see that a man is justified by works and not by faith alone.
The Catholic-Protestant dispute on justification is largely a misunderstanding. Both sides agree that salvation originates in grace. The question is what saving faith looks like and how it relates to the life of the believer.
Paul and James do not contradict each other. Paul in Romans 3:28 argues against Jewish ceremonial law (circumcision, dietary rules) as the basis for justification. James argues against a dead faith that produces no change in behaviour. Paul says you cannot be saved by keeping the Torah. James says you cannot be saved by intellectual belief that produces no fruit. Both are correct.
The Council of Trent (Session VI, Canon 1) explicitly condemned the idea that 'man may be justified before God by his own works.' Catholic teaching does not assert that works earn salvation. It asserts that grace transforms the person, producing faith that works through love (Gal 5:6). Good works are the fruit of grace, not the price of admission.
The 1999 Joint Declaration on the Doctrine of Justification, signed by the Catholic Church and the Lutheran World Federation, reached substantial agreement: 'By grace alone, in faith in Christ's saving work and not because of any merit on our part, we are accepted by God and receive the Holy Spirit, who renews our hearts while equipping and calling us to good works.'
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