All eyes are on the House today, specifically on the 133 House Republicans who spearheaded the surprise defeat on Monday of the Emergency Economic Stabilization Act of 2008. Meanwhile, signs are growing that the financial crisis has potential to metastasize further, and an observer of the Washington scene gave CPN an exclusive update on why the pending legislation matters more than ever to commercial real estate. Late yesterday, the Senate handily passed (74-25) the latest version of the EESA, which features a number of major changes aimed at making the bill more palatable to those who had opposed it and to the public. Among other things, the changes would: * Raise to $250,000 the cap on federal deposit insurances. * Add $100 billion in tax cuts for businesses and the middle class. * Help 20 million middle-income taxpayers avoid the alternative minimum tax. * Provide $8 billion in tax relief for people hit by natural disasters in Texas, Louisiana and the Midwest. In addition, it was hoped that House Republicans would be wooed by a Tuesday decision by the Securities and Exchange Commission to ease rules forcing companies to value on–balance sheet assets according to their current market prices. Aquiles Suarez, vice president for government affairs at the National Association of Industrial and Office Properties, told CPN that NAIOP is hearing from many of its members, mostly developers, about how they’re being hurt by the financial crisis. “I don’t think we can afford to let this go on.” Members of Congress, he said, were initially inundated with calls from constituents who urged them to vote against the bailout bill. But after the House voted down the rescue measure on Monday, Suarez reported, the tide swung the other way, and all the constituents who were worried about the crisis being left to resolve itself starting calling their congressional representatives. “These people are being whipsawed, and it’s weeks from the election.” The current version of HR 1424, Suarez said, includes several provisions that will be good for the commercial real estate sector. * Reinstatement of 15-year depreciation on qualified leasehold improvements, which expired last year. * Renewal of brownfield remediation expensing, which also expired last year. * Extension of the Energy Efficient Commercial Building deduction, due to expire at year’s end, for another five years, or till 2013. Suarez also told CPN that some of the congressional sources he’s in touch with suggest that HR 1424 might see a vote tonight, rather than tomorrow. If the bill’s supporters think they have the votes in the House to get it passed, he predicted, they’ll go for it immediately rather than wait until Friday. In related news, the Commerce Department reported that factory orders declined 4 percent between July and August; the Dow, S&P and Nasdaq all fell, as did stock indexes in Japan, the U.K., Germany and France; and new unemployment claims rose more than anticipated, to a level not seen since just after the 9/11 attacks. Even the news that oil prices had dipped was seen as bad news, reflecting expectations about a continued drop in demand.