How is the Sermon on the Mount, Matt. 5:17-20 in particular, consistent with grace?
This is an old question addressing the heart of Christianity. There are many good ways to answer this question as you can see here. I had the challenge of choosing who had the best answer. Looking at weaknesses in how people can abuse different theologies isn’t how to approach differences. For example, Paul addressed the abuse of grace in Romans 6.
The test of a good theology is how well it matches God’s revelation in the Bible. I’m not a Dispensationalist and recognize how it can be abused, but want to discuss their answer because it wasn’t given here. We can see a common thread in all the answers, even if there are conflicting theologies.
It is a misguided use of Dispensationalism if dispensations are explained as God tried this and it didn’t work, so the next dispensation, and so on. Obviously, this ignores many of God’s attributes. The valid way to view dispensations is progressive revelation. All the Dispensationalists I know are Trinitarians. Dispensationalists see the Sermon on the Mount as in a different dispensation than Jesus’ later ministry such as his last week before crucifixion. Of course they would see this as Jesus using progressive revelation. John 16:12 supports this.
“I still have many things to say to you, but you cannot bear them now…. (ESV)
A rabbi would normally seek to interpret the Law in such a way to make it more achievable, yet keep the law. However, in the Sermon on the Mount Jesus pointed out the intent of the Law not just the outward actions of the Law, but one's inward thoughts, making the Law impossible to keep through human ability.
The Commandment in which a desire becomes sin before acting on it was what got Paul’s attention.
What then shall we say? That the law is sin? By no means! Yet if it had not been for the law, I would not have known sin. For I would not have known what it is to covet if the law had not said, “You shall not covet.” 8 But sin, seizing an opportunity through the commandment, produced in me all kinds of covetousness. For apart from the law, sin lies dead. 9 I was once alive apart from the law, but when the commandment came, sin came alive and I died. 10 The very commandment that promised life proved to be death to me. 11 For sin, seizing an opportunity through the commandment, deceived me and through it killed me. 12 So the law is holy, and the commandment is holy and righteous and good. (Rom. 7:7–12, ESV)
Jesus changed the “holy” in Leviticus 19:2 to “perfect,” showing a standard too high to obtain with human ability.
You therefore must be perfect, as your heavenly Father is perfect. (Matt 5:48, ESV)
“Perfect” translates τέλειοι. It also mean complete; not in part.
For whoever keeps the whole law but fails in one point has become guilty of all of it. (James 2:10, ESV)
Jesus’ elevation of standards most have seemed strange to the Pharisees who saw Jesus heal on the Sabbath, and his disciples pull off grains of wheat on the Sabbath. But Jesus rebuked self-righteousness.
He also told this parable to some who trusted in themselves that they were righteous, and treated others with contempt: 10 “Two men went up into the temple to pray, one a Pharisee and the other a tax collector. 11 The Pharisee, standing by himself, prayed thus: ‘God, I thank you that I am not like other men, extortioners, unjust, adulterers, or even like this tax collector. 12 I fast twice a week; I give tithes of all that I get.’ 13 But the tax collector, standing far off, would not even lift up his eyes to heaven, but beat his breast, saying, ‘God, be merciful to me, a sinner!’ 14 I tell you, this man went down to his house justified, rather than the other. For everyone who exalts himself will be humbled, but the one who humbles himself will be exalted.” (Luke 18:9–14, ESV)
Of course Jesus did teach grace and forgiveness. He did it often through people.
36 One of the Pharisees asked him to eat with him, and he went into the Pharisee’s house and reclined at table. 37 And behold, a woman of the city, who was a sinner, when she learned that he was reclining at table in the Pharisee’s house, brought an alabaster flask of ointment, 38 and standing behind him at his feet, weeping, she began to wet his feet with her tears and wiped them with the hair of her head and kissed his feet and anointed them with the ointment. 39 Now when the Pharisee who had invited him saw this, he said to himself, “If this man were a prophet, he would have known who and what sort of woman this is who is touching him, for she is a sinner.” 40 And Jesus answering said to him, “Simon, I have something to say to you.” And he answered, “Say it, Teacher.”
41 “A certain moneylender had two debtors. One owed five hundred denarii, and the other fifty. 42 When they could not pay, he cancelled the debt of both. Now which of them will love him more?” 43 Simon answered, “The one, I suppose, for whom he cancelled the larger debt.” And he said to him, “You have judged rightly.” 44 Then turning toward the woman he said to Simon, “Do you see this woman? I entered your house; you gave me no water for my feet, but she has wet my feet with her tears and wiped them with her hair. 45 You gave me no kiss, but from the time I came in she has not ceased to kiss my feet. 46 You did not anoint my head with oil, but she has anointed my feet with ointment. 47 Therefore I tell you, her sins, which are many, are forgiven—for she loved much. But he who is forgiven little, loves little.” 48 And he said to her, “Your sins are forgiven.” 49 Then those who were at table with him began to say among themselves, “Who is this, who even forgives sins?” 50 And he said to the woman, “Your faith has saved you; go in peace.” (Luke 7:36–50, ESV)
Jesus also taught grace through faith.
And as Moses lifted up the serpent in the wilderness, so must the Son of Man be lifted up, 15 that whoever believes in him may have eternal life.
16 “For God so loved the world, that he gave his only Son, that whoever believes in him should not perish but have eternal life. 17 For God did not send his Son into the world to condemn the world, but in order that the world might be saved through him. 18 Whoever believes in him is not condemned, but whoever does not believe is condemned already, because he has not believed in the name of the only Son of God. (John 3:14–18, ESV)
Then they said to him, “What must we do, to be doing the works of God?” 29 Jesus answered them, “This is the work of God, that you believe in him whom he has sent.” (John 6:28–29, ESV)
Knowing a tree by its fruit implies that one’s actions demonstrates that a person in Christ (has faith in Christ) and the vine metaphor in John 15 illustrates Christ producing those actions in those who abide in him. Thus, salvation by faith alone does not mean faith doesn’t produce works.
Beware of false prophets, who come to you in sheep’s clothing but inwardly are ravenous wolves. 16 You will recognize them by their fruits. Are grapes gathered from thornbushes, or figs from thistles? 17 So, every healthy tree bears good fruit, but the diseased tree bears bad fruit. 18 A healthy tree cannot bear bad fruit, nor can a diseased tree bear good fruit. 19 Every tree that does not bear good fruit is cut down and thrown into the fire. 20 Thus you will recognize them by their fruits. (Matt 7:15–20, ESV)
Thus, the contrast of the Sermon on the Mount with grace is a matter of progressive revelation. The Pharisees, although living by the highest human standards, lowered the standards of the Law with their traditions. Jesus showed God’s standards as intended in the Law was even higher; impossible for people to achieve on their own. Thus, the need for grace and the indwelling Holy Spirit.