For the bishops, much to lose in the contraception kerfuffle
The battle lines keep shifting on the contraception front: Catholic Charities USA denies that it has endorsed  the Obama administration's "accomodation" for religiously affiliated social service, health, and educational institutions. (They had been listed by Faith in Public Life with other faith groups as supporters.) The Catholic Health Association, however, has endorsed it, as has the Association of Jesuit Colleges and Universities, the Sisters of Mercy, and Notre Dame. Yesterday Faith in Public Life did a conference call  with Notre Dame's Cathleen Kaveny (also a columnist for Commonweal), Duquesne's Nick Cafardi, and Catholic University's Stephen Schneck, all of whom came out in favor of the solution. Meanwhile, the list of Catholic colleges and universities who admit to covering contraception for their employees grows, including Dayton University in western Ohio , which has no plans to drop the coverage.
The U.S. bishops, on the other hand, not only reject the administration's accomodation, but have expanded their objection to applying the mandate to any employer at all, with their general counsel, Anthony Picarello arguing that if he opened a Taco Bell , he shouldn't have to provide contraception coverage for his employees.
But making access to certain kinds of health care dependent on the individual conscience of one's employer is not going to fly with many; as a negotiating starting point, it's also a non-starter. To take such a position in an election year further makes the bishops appear to be supporting the GOP under the cover of an appeal to "religious freedom." (Both sides are ready to take this issue to voters .)
I fear that approach may backfire, further isolating them not only from the political mainstream but from rank-and-file Catholics as well --who don't want bishops telling them how to vote. Put simply, access to contraception is simply not the hill the bishops should want to die on, especially not when their main talking point seems to be "pregnancy is not a disease," a statement that utterly ignores the medical, much less economic, reality of pregnancy and childbirth. The longer this goes, the more extreme the bishops will appear, and I do not see any positive outcome for them.
The compromise that is being offered may not be perfect, but it provides sufficient moral distance for employers to live with. I still argue that the complete exemption for explicitly religious institutions is far broader than anyone acknowledges.
The bishops got a pretty good deal on the political side of things and showed they still have some political muscle. But trying to push their winner-take-all approach for the sake of ideological purity will not get them further concessions--and it could do them great damage. They should heed the moderate Catholic voices around them and declare victory.