Once again the news this week was dominated by debate surrounding the federal budget, deficit reduction and the looming vote to extend the debt ceiling. The week began with Speaker Boehner making a speech before the Economic Club of New York on Monday and closed with a report from the trustees for Social Security and Medicare that warned that the funds will reach insolvency sooner than anticipated. In the interim, President Obama separately met with Democratic and Republican members of the Senate to discuss these issues and the U.S. Treasury came within a hair’s breadth of breaching the debt limit with a bond sale on Thursday.

The other major news this past week was the admission by the FSOC at a Senate Banking Committee hearing on Thursday that it would be revisiting its definition of systemically important financial institution (“SIFI”) and that the SIFI rules, initially anticipated by mid-summer 2011, will be pushed back at least until mid-fall. This is a clear victory for the insurance companies, asset management firms, mutual funds and other non-bank financial institutions who were concerned about an overly broad SIFI definition that would have ensnared companies and firms under the regulation of the Fed, as well as the other regulatory burdens that a SIFI designation encompasses, such as the need for a living will.