I agree with American Papist, who said: "I'm extremely pessimistic about Notre Dame rescinding the invitation. You simply can't deny a sitting President from speaking once you have invited him. The cat is already out of the bag. What can and will happen, I hope, is a frank discussion in the public spotlight about a) the mission and identity of Catholic universities and b) a greater awareness of the anti-Catholic policies and legislation that Obama is currently pursuing."
I expect (and hope for) a huge pro-life protest on the day of the event. Is it too much to hope for something in the scale of the annual Washington, DC "March for Life"?
In an apparent attempt to stem the outrage, Notre Dame announced today that Mary Ann Glendon, former U.S. ambassador to the Vatican, will be presented the Laetare Medal at the May 17th commencement. The AP reports that the medal is "considered the most prestigious honor for American Catholics" and that "Since 1883, the Laetare Medal has been awarded annually to a Catholic 'whose genius has ennobled the arts and sciences, illustrated the ideals of the church and enriched the heritage of humanity.'" (Although Martin Sheen got the medal last year, so I'm not sure how prestigious it is.)
UPDATE: In 2004, the United States Conference of Catholic Bishops published a statement entitled "Catholics in Political Life," which said:
The Catholic community and Catholic institutions should not honor those who act in defiance of our fundamental moral principles. They should not be given awards, honors or platforms which would suggest support for their actions.I don't think the Obama invitation complies with this principle.

