Final answer:
The principal diagnosis for the patient should be severe sepsis, which is a life-threatening condition caused by an infection affecting multiple organ systems.
Step-by-step explanation:
The principal diagnosis for the patient should be severe sepsis. Severe sepsis is a life-threatening condition caused by an infection that affects multiple organ systems. In this case, the urinary tract infection caused by vancomycin resistant enterococcus led to the development of severe sepsis. Although acute respiratory failure is a significant complication, it is considered a secondary diagnosis in this scenario.