They obviously think they have a winning issue against the GOP. If not, they are using the controversy to gin up support among their base.
Either way, the next step is going to involve the courts. Fox News:
Despite renewed statements of concern by Catholic leaders, the Obama administration is done negotiating and will finalize its plan requiring insurance companies to provide free contraception to women working and studying at religious institutions, President Obama's chief of staff said Sunday.
Jacob Lew told "Fox News Sunday" that the compromise offered last week to address objections by the Catholic Church is clear and consistent with the president's "very deep belief that a woman has a right to all forms of preventive health care, including contraception."
"We have set out our policy," Lew said. "We are going to finalize it in the final rules, but I think what the president announced on Friday is a balanced approach that meets the concerns raised both in terms of access to health care and in terms of protecting religious liberties, and we think that's the right approach."
On Friday, Obama revised his decision to require all employers to provide contraceptive care after Catholic organizations balked that it is an intrusion on the Church's religious liberty to require it to provide birth control. The president changed the mandate to shift the burden to insurance companies to provide free access to birth control and other forms of contraception.
"No institution, nonprofit institution, that has religious principles that would be violated has to pay for or directly offer these services, but women have access to the kinds of care they're entitled to. We think that's the right approach," Lew said Sunday.
Obama believes he has offered Catholics "an out" regarding their consciences. Liberals make these kind of compromises all the time, so it is not surprising that the president and his people are a little perplexed at the Catholic Bishops who take a rather less flexible approach to matters of faith.
They just don't get it and they never will.