Liberals like Neuhaus like to pick and choose their quotes, always with an eye towards forwarding their liberal agenda. So before someone brings up "Pope Leo was speaking to another time" or some other such nonsense (as if truth changes). The often vague Catechism of the Catholic Church, released less than 20 years ago says exactly the same thing:
2105 The duty of offering God genuine worship concerns man both individually and socially. This is "the traditional Catholic teaching on the moral duty of individuals and societies toward the true religion and the one Church of Christ."30 By constantly evangelizing men, the Church works toward enabling them "to infuse the Christian spirit into the mentality and mores, laws and structures of the communities in which [they] live."31 The social duty of Christians is to respect and awaken in each man the love of the true and the good. It requires them to make known the worship of the one true religion which subsists in the Catholic and apostolic Church.32 Christians are called to be the light of the world. Thus, the Church shows forth the kingship of Christ over all creation and in particular over human societies.33
And in fact the "33" in the above quote refers to this footnote:
33 Cf. AA 13; Leo XIII, Immortale Dei 3,17; Pius XI, Quas primas 8,20.
Sorry, no way out for Fr. Neuhaus. He is denying the catechism. While it does not necessarily rise to the level of formal heresy, it is material heresy.
This, then, is the teaching of the Catholic Church concerning the constitution and government of the State. By the words and decrees just cited, if judged dispassionately, no one of the several forms of government is in itself condemned, inasmuch as none of them contains anything contrary to Catholic doctrine, and all of them are capable, if wisely and justly managed, to insure the welfare of the State. Neither is it blameworthy in itself, in any manner, for the people to have a share greater or less, in the government: for at certain times, and under certain laws, such participation may not only be of benefit to the citizens, but may even be of obligation. Nor is there any reason why any one should accuse the Church of being wanting in gentleness of action or largeness of view, or of being opposed to real and lawful liberty. The Church, indeed, deems it unlawful to place the various forms of divine worship on the same footing as the true religion, but does not, on that account, condemn those rulers who, for the sake of securing some great good or of hindering some great evil, allow patiently custom or usage to be a kind of sanction for each kind of religion having its place in the State. And, in fact, the Church is wont to take earnest heed that no one shall be forced to embrace the Catholic faith against his will, for, as St. Augustine wisely reminds us, "Man cannot believe otherwise than of his own will
*Look, America was created by Calvinists yet we have found a home here and not a single Pope has condemned our Constitution nor stated in must profess that Jesus is Lord.
As for Fr Nuehaus being a material heretic, that is laughable
The Church, the guardian always of her own right and most observant of that of others, holds that it is not her province to decide which is the best among many different forms of government and the civil institutions of Christian states, and amid the various kinds of State rule she does not disapprove of any, provided the respect due to religion and the observance of good morals be upheld.
KJ, you're way off base here