Reformed covenant theology does not juxtapose Israel and the church. For Reformed theology, the church has always been the Israel of God and the Israel of God has always been the church. Reformed covenant theology distinguishes the old and new covenants (2 Cor. 3; Heb. 7-10). It recognizes that the church was temporarily administered through a typological, national people, but the church has existed since Adam, Noah, and Abraham; and it existed under Moses and David; and it exists under Christ.
Recently I had a question asking whether “covenant theology” is so-called “replacement theology.” Those dispensational critics of Reformed covenant theology who accuse it of teaching that the New Covenant church has “replaced” Israel do not understand historic Reformed covenant theology. They are imputing to Reformed theology a way of thinking about redemptive history that has more in common with dispensationalism than it does with Reformed theology.
First, the very category of “replacement” is foreign to Reformed theology because it assumes a dispensational, Israeleo-centric way of thinking. It assumes that the temporary, national people was, in fact, intended to be the permanent arrangement. Such a way of thinking is contrary to the promise in Gen. 3:15. The promise was that there would be a Savior. The national people was only a means to that end, not an end in itself. According to Paul in Ephesians 2:11-22, in Christ the dividing wall has been destroyed. It cannot be rebuilt. The two peoples (Jews and Gentiles) have been made one in Christ. Among those who are united to Christ by grace alone, through faith alone, there is no Jew nor Gentile (Rom. 10:12; Gal. 3:28; Col. 3:11).
At least some forms of dispensationalism have suggested that God intended the national covenant with Israel to be permanent. According to Reformed theology, the Mosaic covenant was never intended to be permanent. According to Galatians 3 (and chapter 4), the Mosaic covenant was a codicil to the Abrahamic covenant. A codicil is added to an existing document. It doesn’t replace the existing document. Dispensationalism reverses things. It makes the Abrahamic covenant a codicil to the Mosaic. Hebrews 3 says that Moses was a worker in Jesus’ house. Dispensationalism makes Jesus a worker in Moses’ house.
