If the children are holy then they are presumed to be with Christ.
I think you are confusing the difference between federally holy and individually holy. Federally holy as our standards affirm makes no claim at all to presumption or knowledge that the individual is regenerated, but federally holy instead refers to being set apart, a member of the visible church (covenant community,) in the historical administration of the covenant of grace. Our standards clearly state in WCF 28-6 that that grace is conferred by the Holy Ghost, to such (whether of age or infants) as that grace belongeth unto, according to the counsel of God´s own will, in His appointed time. There is no presumption in that statement that the Holy Spirit will confer grace upon all those who are baptized or even for arguments sake the majority of those who are baptized and are members of the visible church. The Holy Sprit confers grace to those to whom it belongs to, when He wants, according to the will of God (unconditional election.)
The revivalistic views that have dominated American presbyterianism for a long time create a third category. The use of infant baptism by those with revivalistic views (those who view their children as essentially pagans with a baptism that does not really seal (authenticate) their status before God) really have a third category.
I think the views on covenant and election that I explained are those of our standards and historic Presbyterianism. If Reformed churchmen of the past such as Thomas Watson, William Guthrie and today a TE today like Sinclair Ferguson get tagged as revivalists by the sacramentalists, then we know the charge is way off base. I and these men are saying nothing more then that our covenant children have a covenantal obligation to seek the Lord, to close with Christ in repentance and personal faith. Since in Adam ALL sinned and being a member of the covenant in terms of its historical administration is no assurance of election, then our children have the obligation to close with Christ by repentance and personal faith or they will go to hell. The only way presumed regeneration makes sense is if somehow being in the administration of the covenant guaranteed the election of all who are in it, but the scriptures and our own experiences show plenty of examples to the contrary.
This in no way removes the great advantages our children have has members of the covenant. Their baptism itself functions as a powerful call to faith and God certainly delights to work through families. Our children are set apart in the covenant community, live in homes where the ordinary means God (faith comes by hearing) uses to bring people to faith should be saturating their lives. They have fathers, mothers and elders seeking for their salvation. How this can be called putting our children in the same position as pagans is a mystery to me? The alternative being proposed amounts to a confusing of the sign with the thing signified and an opus operatum view of baptism, where the sacrament is given efficacy apart from personal faith.
Thomas Watson:
"Get a real work of grace in your heart. 'It is a good thing that the heart be established with grace.´ Heb 13: 9. Nothing will hold out but grace; it is only this anointing abides; paint will fall off. Get a heartchanging work. 'But ye are washed, but ye are sanctified.' I Cor 6: 2: Be not content with baptism of water, without baptism of the Spirit. The reason men persevere not in religion, is for want of a vital principle; a branch must needs wither that has no root to grow upon."
William Guthrie:
"Believing on Christ must be personal; a man himself and in his own proper person must close with Christ Jesus-"˜The just shall live by his faith.´ (Hab. 2:4.) This says, that it will not suffice for a man´s safety and relief, that he is in covenant with God as a born member of the visible church, by virtue of the parent´s subjection to God´s ordinances: neither will it suffice that the person had the initiating seal of baptism added, and that he then virtually engaged to seek salvation by Christ´s blood, as all infants do: neither does it suffice that men are come of believing parents; their faith will not instate their children into a right to the spiritual blessings of the covenant; neither will it suffice that parents did, in some respects, engage for their children, and give them away unto God: all these things do not avail. The children of the kingdom and of godly predecessors are cast out. Unless a man in his own person have faith in Christ Jesus, and with his own heart approve and acquiesce in that device of saving sinners, he cannot be saved. I grant, this faith is given unto him by Christ; but certain it is, that it must be personal."
[Edited on 1-12-2004 by AdamM]