Show of hands -- who was surprised that conservatives, conservative Catholics, and Catholic conservatives didn't do a happy dance in response to President Obama's revision of the contraception-coverage mandate?First, the U.S. Conference of Catholic Bishops complained that the religious exemption in the original mandate was far too narrow. They pointed out that Catholic institutions -- animated by religious belief -- that provided service in the areas of health care, education, and charitable work would be made to purchase health coverage that included services inimical to Catholic teaching. In other words, the bishops argued that their religious freedom was being infringed upon. And I agreed. Commonweal agreed. America agreed. The National Catholic Reporter agreed. E. J. Dionne. Mark Shields. Amy Sullivan. The Washington Post. The Economist. We all agreed that the Obama administration had overreached and needed to walk back the policy.But then we started hearing other noises from the USCCB prolife office. The Hawaii arrangement? Phooey. It would force us to refer for immoral services. Then we heard bells. Taco bells, specifically, when USCCB Associate General Secretary Anthony Picarello floated the theory that the even if a Hawaii-like compromise was reached, the bishops still wouldn't be satisfied because good Catholic employers, say, ones who owned Taco Bells, who didn't want to provide contraception coverage -- wherever they are -- would not be exempt. That's when some of us started to see the writing on the wall.Yesterday, a flurry of USCCB letters and statements -- private and public -- gave the impression that the bishops are not of one mind when it comes to the revised mandate. To review, the new contraception mandate will not force any Catholic institution to purchase coverage that includes contraception services. Instead, it requires insurance companies to contact employees at such institutions and offer a separate policy that covers contraception at no cost to either employer or employee.The first statement from the USCCB announced that the bishops were studying the new policy. Cardinal-designate Dolan, president of the bishops conference, called the revised rule "a step in the right direction,"and said he hoped to "work with the administration" to address the bishops' concerns. Later in the day, another press release went up on the USCCB website. Titled, "Bishops Renew Call to Legislative Action on Religious Liberty" -- in other words: we need you makers of law to write one to undo the mandate -- the statement is considerably less optimistic than Dolan's. Laced with sloppy talking points (e.g., "pregnancy is not a disease"), the statement says the conference needs time to study the administration's proposal -- but the bishops still want legislators and judges to rescind the mandate altogether:

First, he [Obama] has decided to retain HHS's nationwide mandate of insurance coverage of sterilization and contraception, including some abortifacients. This is both unsupported in the law and remains a grave moral concern. We cannot fail to reiterate this, even as so many would focus exclusively on the question of religious liberty.

Are the bishops asserting that the Affordable Care Act itself is illegal? HHS developed the list of mandated medical services (which includes contraception, along with many other services) because the ACA required it. And those "so many" who "would focus on exclusively on the question of religious liberty" are bishops. Like Thomas Wenski, archbishop of Miami, who just yesterday complained that "the administration continues to insist that the issue is about contraception; we disagree. It is about the first freedom of our Bill of Rights: the freedom of religion and respect for the rights of conscience." So which is it? That the Affordable Care Act is illegal and gravely immoral because it mandates that employees have access to contraception coverage (including some that could act as abortifacients) -- in other words, it's about contraception? Or is it that the mandate is objectionable because, even as revised, it tramples religious freedom?Here's how that USCCB press release summarizes the revised mandate:

It would still mandate that all insurers must include coverage for the objectionable services in all the policies they would write. At this point, it would appear that self-insuring religious employers, and religious insurance companies, are not exempt from this mandate.

This is an important point. I'm told the administration is committed to figuring this out; but it won't be easy. Self-funded insurance plans ("self-insurance" is a misnomer) only contract with insurance companies to handle administrative tasks. Will those insurers provide the free contraception? This needs to get settled soon.Back to the press release:

These changes require careful moral analysis, and moreover, appear subject to some measure of change. But we note at the outset that the lack of clear protection for key stakeholdersfor self-insured religious employers; for religious and secular for-profit employers; for secular non-profit employers; for religious insurers; and for individualsis unacceptable and must be corrected. And in the case where the employee and insurer agree to add the objectionable coverage, that coverage is still provided as a part of the objecting employer's plan, financed in the same way as the rest of the coverage offered by the objecting employer. This, too, raises serious moral concerns.

As explained to me by senior administration officials, that is false. Contraception coverage will be offered as a separate policy. If the bishops want to argue, as some critics already are, that they're funding contraception by virtue of paying an insurance company at all, then they have committed themselves to a position at odds with their own practice. The premise of such a criticism is that money is fungible. Any dollar I give to an insurer -- even for a policy that does not include contraception -- could be used to offset the cost of providing such services as a separate policy. (That is the same argument the USCCB used to oppose the Affordable Care Act's mechanism for handling abortion funding.) But of course bishops are currently doing just that -- paying, say, Aetna for plans excluding contraception and abortion, while Aetna covers those services for other enrollees. Yet we have not heard a peep objecting to the arrangement.And then there's the question of the the bishops' previous policy positions. During the health-care debate, the USCCB repeated the mantra that, when it came to abortion funding, all it wanted was to preserve the status quo, namely, the protections of the Hyde Amendment. That amendment prevents federal dollars from paying for elective abortions. For example, Medicaid is funded by a combination of state and federal dollars. Some states allow enrollees to receive coverage for elective abortions. The Hyde Amendment requires such states to segregate federal dollars from state funds that pay for elective abortions. So the bishops have already approved of a segregation-of-funds arrangement -- and one that, according to Catholic teaching, involves a much graver evil. Why wouldn't they approve of another one involving a lesser evil?The revised ruling dispels the bishops' original -- and legitimate -- criticism that Catholic institutions would be made to subsidize services they consider immoral. While the USCCB never made an explicit Catholic moral-theological argument, they were implicitly rejecting the first version of the mandate because, on their view, it forced them to illicitly cooperate with evil. Now, according to the new ruling, they won't have to directly fund plans that include contraception. Keep in mind, the original narrow exemption remains in place. According to senior administration officials, the employees of chanceries, parishes, parish schools will not be eligible to receive free contraception coverage as a separate policy. But by the Catholic tradition's reasoning, the bishops' own policy positions, and their practice, they have run out of good reasons to object to the ruling.Let's say the bishops fail to grasp that the revised mandate constitutes a major victory for them, and they do not come to the same conclusions about the new ruling as have the Catholic Health Association, Catholic Charities USA (at least initially), and the Catholic social-justice group NETWORK -- all of which have praised the revised mandate. What if they decide to pull employee health coverage and pay the penalty? How many institutions would be affected? Chanceries, parishes, and parish schools will not have to comply with the new mandate when it goes to effect in August 2013. The vast majority of Catholic colleges and universities are not under the administrative control of bishops. After the hospitals and the charitable organizations, what's left?If the bishops really want to go to bat for every private employer's alleged right to opt out of providing contraception coverage, they will lose the public argument. And not only because Taco Bells don't exist to carry out the mission of the Catholic Church, but because the public will start to wonder whether their objections all along weren't motivated by religious-freedom concerns so much as by the desire to keep women from obtaining contraception.