Boys and girls at Grace Academy in Prosper, Tex., spent most of last Friday making homemade Christmas cards for bedridden veterans at the VA hospital in Dallas.

Fourth-grader Gracie Brown was especially proud of her card, hoping it would “make their day because their family might live far away, and they might not have somebody to celebrate Christmas with.”

“I’d like them to know they’ve not been forgotten and somebody wanted to say thank you,” Gracie told MyFoxDFW.com.

Gracie’s card read, “Merry Christmas. Thank you for your service.” It also included an American flag.

But the bedridden veterans at the VA hospital will never get to see Gracie’s card. Nor will they see the cards made by 51 other students. That’s because the Christmas cards violated VA policy.

"It really didn't occur to me there would be a problem with distributing Christmas cards," said Susan Chapman, a math teacher at the academy. She's married to a veteran and volunteers with the American Legion and other veterans' organizations.

On Monday morning the boys and girls were planning on hand delivering the cards to the wounded veterans. Chapman called the hospital to make final arrangements and that’s when she learned there was a problem.

"I told him my students made cards, we'd like to bring them down for the veterans," Chapman told the television station. "And he said, 'That's great. We're thrilled to have them, except the only thing is, we can't accept anything that says ‘Merry Christmas' or ‘God bless you' or any scriptural references because of all the red tape.'"

A VA official quoted the policy which is in the Veterans Health Administration handbook:

"In order to be respectful of our veterans' religious beliefs, all donated holiday cards are reviewed by a multi-disciplinary team of staff led by chaplaincy services and determined if they are appropriate (non-religious) to freely distribute to patients. We regret this process was not fully explained to this group and apologize for any misunderstanding."

Hiram Sasser, director of litigation for Liberty Institute, said it was a new low “even for the Scrooges and Grinches at the VA.”

“Targeting the benevolent work of little children for censorship is disgusting,” Sasser told me. “Do the Grinches in the administration of the VA really believe our bravest warriors need protection from the heartfelt well wishes of small children saying Merry Christmas?”

Andrea Brown, Gracie’s mom, was dumbfounded by the news.

“This wasn’t the country I grew up in, when you couldn’t say ‘Merry Christmas,’ you couldn’t say ‘God bless you’ or reference any scripture,” she told MyFoxDFW.com.

She told the television station the boys and girls were heartbroken that the military personnel would not be able to receive their cards.

"They couldn't believe the people that these people they wanted to honor weren't going to get the chance to see what they had done," she said.

The cards will not be thrown away -- they are being shipped to Brook Army Medical Center in San Antonio and to a private facility for veterans in Louisiana.

Sasser said at some point, “does the VA have no shame?”

“Mr. Potter from ‘It’s a Wonderful Life’ wouldn’t even ban little children from wishing our veterans Merry Christmas,” Sasser said.