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CNN Live At Daybreak

Highlights of 09/11 Testimony

Aired March 24, 2004 - 05:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CAROL COSTELLO, CNN ANCHOR: Good morning to you.
It is Wednesday, March 24.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining us.

His new book blasts President Bush for botching the war on terror. Well, today former counter-terrorism czar Richard Clarke will air his complaints at a public hearing of the 9/11 Commission.

A military convoy comes under attack in Falluja, west of Baghdad. Two coalition soldiers are wounded, but their nationalities are unclear.

A specific threat shuts the U.S. Embassy in the United Arab Emirates. Reaction to the killing of Sheikh Ahmed Yassin may have led to the closing.

A memorial service begins next hour for the 190 people killed in the Spanish train bombings. Leaders from around the world are attending the state funeral.

And rescue crews are searching five states for a small plane carrying NASCAR fans. The plane has been missing since Sunday night.

We update the top stories every 15 minutes. The next news update comes your way at 5:15 Eastern.

It should be a dramatic day at the 9/11 Commission hearings. Here is the lineup. George Tenet, CIA chief under both the Clinton and Bush administrations, will kick off the testimony. He will be followed by Clinton's national security advisor, Samuel Berger. And then we'll hear from Richard Clarke, who worked for both Bush and Clinton as counter-terrorism director. His new book alleges Bush administration failures leading up to and following 9/11. Finally, Deputy Secretary of State Richard Armitage will appear. He takes the place of National Security Advisor Condoleezza Rice, who has refused to testify publicly.

You can sum up the previous day's 9/11 hearings in just five words -- we just didn't know enough.

CNN's David Ensor highlights the testimony on why the U.S. did not take out al Qaeda before 9/11.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The commission staff director told of at least three different times the CIA thought it had Osama bin Laden in its sights, once in particular at a desert camp in Afghanistan in February of '99 where bin Laden stayed for a week but there was a problem.

PHILLIP ZELIKOW, EXEC. DIR., 9/11 COMMISSION: According to CIA officials, policymakers were concerned about the danger that a strike might kill an Emirati prince or other senior officials who might be with bin Laden or close by.

ENSOR: The Clinton administration hesitated, Philip Zelikow says, because near bin Laden were senior men from the United Arab Emirates at a hunting camp and, before long, the opportunity was lost. Then Defense Secretary William Cohen insists there never was a clear shot at bin Laden.

WILLIAM COHEN, FMR. DEFENSE SECRETARY: If the director of Central Intelligence says we don't have it then you have to rely upon that.

ENSOR: The commissioners grilled both Clinton administration and Bush administration officials about why they didn't strike al Qaeda earlier.

BOB KERREY, 9/11 COMMISSION MEMBER: The fact that it's unpopular, that it's difficult, that our allies are not necessarily with it shouldn't deter a president who believes that what we have is a serial killer on our hands.

SLADE GORTON (R), COMMISSION MEMBER: What made you think even when you took over and got these first briefings, given the history of al Qaeda and its successful attacks on Americans that we had the luxury even of seven months before we could make any kind of response much less three years?

ENSOR: Secretary of Defense Rumsfeld said time for planning was needed that just firing off cruise missiles, as the Clinton administration did once, seemed pointless.

DONALD RUMSFELD, DEFENSE SECRETARY: You can hit their terrorist training camps over and over and over and expend millions of dollars in U.S. weapons against targets that are dirt and tents and accomplish next to nothing.

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: We were mostly accused of over reacting not under reacting and I believe we reacted appropriately and, as I said earlier, we would have acted more had we had actionable intelligence.

(END VIDEOTAPE)

COSTELLO: White House officials are challenging Richard Clarke's credibility on several fronts. They've now released a copy of the letter Clarke wrote when he resigned as counter-terrorism chief in January of 2003. The letter makes no mention of the concerns Clarke writes about in his book. The letter also includes positive comments about President Bush.

Here are some excerpts. I'm going to read one to you. "It has been an enormous privilege," Clarke says, "to serve you these last 24 months. I will always remember the courage, determination, calm and leadership you demonstrated on September 11. I will also have fond memories of our briefings for you on cyber security and the intuitive understanding of its importance that you showed."

That's from Richard Clarke to President Bush.

Tonight, after his testimony, Richard Clarke will speak with Larry King. You can watch that on CNN at 9:00 p.m. Eastern.

And remember, you can follow our live hourly coverage of today's hearing. That will start at 9:00 a.m. Eastern. That's on the 9/11 Commission hearing. That's what I'm talking about there.

Israel and Hamas staring down each other this morning. Israel says it's actively targeting Hamas leadership. And there's a new man at the top of Hamas, Abdel Aziz Rantisi. He says he will follow the same path as his predecessor.

Live now to Gaza City and our Brent Sadler -- hello, Brent.

BRENT SADLER, CNN CORRESPONDENT: Hello.

Good morning, Carol.

Continuing military activity in southern Gaza. In the early hours of this morning, Israeli tanks led an incursion against the Khan Younis refugee camp. This after Palestinian militants had planted -- or, rather, attempted to plant a bomb in a Jewish settlement. Dozens of Palestinian homes destroyed.

In the wider regional context, a flare-up in violence across the border between Lebanon and northern Israel. Israeli air strikes against Hezbollah Monday, soon after the assassination of Sheikh Ahmed Yassin, followed by another strike against pmts from the Popular Front for the Liberation of Palestine general command, who fired, reportedly, mortars against Israeli settlements in northern Israel, provoking another Israeli air strike.

Now, on the Israeli staff side, continuing anxiety about the possibility of more suicide bombings against Israeli targets. In an opinion poll published in a top Israeli newspaper, some 60 percent of Israelis say they supported Prime Minister Ariel Sharon's decision to go ahead with targeted assassinations. But at least 80 percent of Israelis, it's reported, understand that this may lead to an escalate in violence with Hamas, causing, perhaps, more suicide bombings against Israeli targets.

Now, as far as the new leadership of Hamas is concerned, there has been a smooth transition of power. Abdel Aziz Rantisi has risen to the top here in Gaza after an election. He is a very able lieutenant of the assassinated leadership, Ahmed Yassin. In fact, he is a hardliner among a very hard-line, militant group.

Rantisi has been a very visible and popular figure here in Gaza and abroad and, in fact, he was the subject of an attempted assassination against him last June, when he escaped an Israeli missile strike, a man who knows that once again he must be in Israeli gun sights -- Carol.

COSTELLO: Brent Sadler reporting live from Gaza City this morning.

The Pledge of Allegiance begins our look at some of the news across America.

The Supreme Court will hear arguments today in the case of a California man who successfully sued to get the Pledge of Allegiance ruled unconstitutional. He objects to the phrase "under god." Only eight of the justices will hear the arguments. Justice Scalia has recused himself because he has already spoken out in favor of the Pledge.

No pain, no gain -- a 37-year-old New York man is suing Crunch Fitness for more than $1 million. He says their workout nearly killed him. The suit alleges that three days after the first session he was hospitalized with a kidney condition caused by extreme exertion. Crunch Fitness calls the man's claims highly suspect.

Today, off the coast of South Carolina, scientists will take another crack at freeing a tangled whale. The whale was discovered last week caught in fishing lines. Experts say if it isn't freed soon, the 34-foot endangered whale will surely die.

To the forecast center now to say good morning to Chad -- good morning.

CHAD MYERS, CNN CORRESPONDENT: Good morning, Carol.

They should have pleasant weather for that out there, too. You really don't want seas 16, 20 feet high when you're trying to -- when you're in an eight foot rubber boat trying to get this off the whale. So they should have pretty pleasant weather out there.

(WEATHER REPORT)

COSTELLO: All right, thank you, Chad.

MYERS: You're welcome.

COSTELLO: Still to come, pain at the pump. Find out how much gas prices are going to go up before they go down. Yes, they're going to rise even higher.

Plus, a $15,000 broken leg? Or what about getting a $100,000 hospital bill? It happens. Coming up, our special series on the middle class squeeze.

Also, bags of bagels, shelves of cereal -- are you confused about carbs? The good, the bad and the ugly on losing weight with America's latest diet obsession.

It is Wednesday, March 24th.

You are watching DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: 5:13 Eastern time.

Time to take a quick look at the top stories now.

Former White House terrorism advisor Richard Clarke testifies before the 9/11 Commission today. His new book blasts President Bush's leadership in fighting terrorism.

A government report says the Medicare system will go broke in the year 2019 if no changes are made to the current system. That's 11 years sooner than previously thought.

We now know why legendary singer Aretha Franklin is in the hospital. Her doctors say she had an allergic reaction to antibiotics, but she is getting better. The soul singer turns 62 tomorrow.

We update the top stories every 15 minutes. The next update comes your way at 5:30 Eastern.

All this week on DAYBREAK we are looking at the health care challenges facing middle class Americans. This morning, the unlevel playing field in our nation's hospitals. If you have insurance and you go to the hospital, you still may think your bill is too high. But if you don't have insurance, you may feel like you're the victim of price gouging.

CNN's Peter Viles has more for you.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Ed and Dianna Jellison are still paying the price for a trip to the hospital two years ago. Suffering from encephalitis, a viral infection, Ed was hospitalized 17 days.

JELLISON: My whole world had been turned completely upside down. We lost our business. My husband wasn't going to be the same again. Everything had changed.

VILES: They paid $30,000 in doctor's bills, but then another bill came from Florida Hospital, $116,000. The Jellisons had no health insurance. If they did, the insurance company would have been charged a fraction of that amount.

JELLISON: It makes me very mad, very mad.

VILES: But that's the way hospital billing works. List prices are wildly inflated, but insurance companies don't pay those high prices. Only the uninsured do.

K.B. FORBES, WWW.CONSEJOHELP.ORG: It is outrageous that they price-gouge a working-class, middle-class family here in the United States. It's all about greed. All they wanted to do was suck out the hard-earned assets of this family.

VILES: These are cases K.B. Forbes has analyzed. An appendectomy, the bill to Medicare would be $10,000, to an insurance company, $12,000, but if you are uninsured, $29,000. A broken leg cost Medicare $4,800. It costs an insurance company $5,400. Cost if you have no insurance, $15,000.

Still, the hospital industry says it loses money treating the uninsured.

CARMELA COYLE, AMERICAN HOSPITAL ASSOCIATION: We have 44 million Americans who have no health insurance coverage at all. And while they come to America's hospital emergency departments and are able to receive care, there is no payment that's ultimately received for many of those patients.

VILES: The Bush administration's point man on this, Tommy Thompson, is urging hospitals to offer discounts to the uninsured and some hospitals are doing so.

(END VIDEOTAPE)

COSTELLO: With more middle class Americans losing their coverage, health insurers have taken an aggressive approach to marketing to the uninsured. That story when our series resumes tomorrow on DAYBREAK.

Bill Gates waits in Brussels today. The European Commission announces its decision on Microsoft's alleged breaches of E.U. competition law. Microsoft could face fines of up to $650 million.

Live to Belgium. Actually, on the phone, our Jim Boulden on just what this means to Microsoft's Windows program -- what does it mean, Jim?

JIM BOULDEN, CNN CORRESPONDENT: Yes, hi, Carol.

What it means is that Microsoft is going to have to offer two operating systems -- one without Media Player, one with Media Player. The reason is is the European Commission feels that Microsoft uses its dominance in the operating system, X.P., by putting Media Player on there for free. And then when someone buys a computer from a store, they simply just go to Media Player and don't use Apple's Quick Time or don't use RealNetwork's RealPlayer. And those two have asked the European Commission to investigate.

For five years, the investigation has gone on. And the European Union says that Microsoft has been using its dominance in the operating system to abuse its power in other areas.

So we should be hearing in about an hour about that $600 million fine, which Microsoft says is far too much, and we should be hearing more about the RealPlayer.

COSTELLO: That is an incredibly hefty fine. You know, something similar took place here in the United States and, you know, it dwindled down to really Microsoft not having to do very much.

Might that happen in Europe, too?

BOULDEN: Well, there's two issues there. One is that you're absolutely right, Microsoft's competitors felt that Department of Justice did not do its job. It did not force Microsoft to level the playing field. So they came here to Europe to ask it to do the same thing.

We're going to hear whether or not the European Union expects Microsoft to behave differently worldwide or only in Europe. And Microsoft says the European Union should only tell it what to do in Europe. But the European Union is looking for a worldwide remedy and so is Microsoft's competitors.

As far as the fine goes, it's double what Microsoft says they thought it would be. Microsoft says that's completely unfair because they did not know they were breaking European law.

COSTELLO: Well, we'll see what happens.

Jim Boulden live from Belgium, on the phone with DAYBREAK this morning.

Coming up next on DAYBREAK...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: There's nothing you can do, really. You've just got to pay.

(END VIDEO CLIP)

COSTELLO: Oh, ain't that the truth? Feeling the pinch at the pump? Is there any relief in sight? No. We'll tell you why.

Up, up and away, a high flying fanatic sets the record straight.

This is DAYBREAK for Wednesday.

(COMMERCIAL BREAK)

COSTELLO: Time now to reach new heights in our DAYBREAK Eye- Opener.

A British man in Colorado says he set a new world record after reaching 42,000 feet in his hot air balloon. That would be nearly eight miles high. Hempleman-Adams made the climb in an open air wicker basket and says the temperature reached 75 degrees below zero at the highest altitude.

In the meantime, the FAA is investigating the flight and actually may charge him with driving his balloon without a license into restricted air space.

Holy mackerel -- I mean, buffalo head. It took a Wisconsin man about 45 minutes to pull in this monster of a fish. It's a large mouthed buffalo head fish, to be exact. The whopper weighed in at 73 pounds, one ounce, which breaks the world record by more than three pounds. Ooh, that's a big fish.

If you enjoyed playing dodge ball as a kid, you are not alone. Adult dodge ball leagues like this one in Portland, Oregon have begun springing up all over the country. Included in the resurgence is a Hollywood dodge ball movie starring Ben Stiller. It hits theaters in June.

Wasn't that a cool game in school, where people just heaved the ball at the less popular kids as hard as they could?

MYERS: I believe that was the point.

COSTELLO: That is so wrong.

MYERS: Well, I...

COSTELLO: It's just so wrong.

MYERS: I believe that's how it went. And then if you caught the ball and somebody else got to come back in. That was progressive dodge ball.

COSTELLO: Oh, thanks for explaining that, Chad.

MYERS: Sure. I remember -- that was only 41 years ago. I remember it vividly.

Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

MYERS: You're welcome.

COSTELLO: We're used to expecting gas prices to go up by Memorial Day. But, ouch, they are already here. Per gallon prices nationwide have reached a record high, almost $1.74. The previous record was set in August of last summer, when the price was almost $1.74 per gallon.

Our Jen Rogers has more on the pump shock.

(BEGIN VIDEOTAPE)

JEN ROGERS, CNN CORRESPONDENT (voice-over): It's a record few Americans will cheer, gasoline prices peaking at a new all time high Tuesday, the nationwide average nearly $1.74 per gallon.

UNIDENTIFIED MALE: There's nothing you can do, really. You just got to pay.

ROGERS: And paying can be painful from coast to coast. AAA reports the highest prices are in California, coming in at $2.14 a gallon. Move east and it doesn't get much better, Arizona $1.91, New York $1.86, Florida $1.77.

ROBERT SINCLAIR, AAA: Usually at this time of year record low prices and we usually don't see higher prices until the Memorial Day weekend which signals the beginning of the summer driving season. The fact that this is happening now is a big deal because really prices should be much lower.

ROGERS: In fact, the government isn't predicting relief around the corner, forecasting gas prices will jump another ten cents a gallon this spring. The problem a lesson in Economics 101, high demand here in the U.S. and booming China facing off against tight supply thanks to OPEC and older refineries struggling with capacity.

Add to the costly mix a seasonal slowdown from refiners shifting to special blends of cleaner burning gas that doesn't cause as much air pollution during the hot summer months.

UNIDENTIFIED MALE: It's a real big hassle, really big hassle.

ROGERS: Even with pump prices at an all time high, on relative terms adjusted for inflation $1.74 is cheap. In 1980, gas cost more than $2.50 in 2004 dollars.

(END VIDEOTAPE)

COSTELLO: And we will talk more about these record prices in the next hour of DAYBREAK with AAA's Montill Williams. He will join us to talk about why and how much higher gas prices will go when we really start driving into the summer.

In the next half hour of DAYBREAK...

(BEGIN VIDEO CLIP)

UNIDENTIFIED CHILDREN: ... the United States of America.

(END VIDEO CLIP)

COSTELLO: "Under god" under fire -- the Supreme Court hears from a man who wants to ban the words "under god" from the Pledge of Allegiance.

And violence erupts west of Baghdad as Iraqis count down the transfer of power. We'll have a live report for you out of Baghdad straight ahead.

And are you confused about carbs? What's a good carb, what's a bad carb? Dr. Sanjay Gupta to the rescue, straight ahead.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


Aired March 24, 2004 - 05:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Good morning to you.
It is Wednesday, March 24.

From the CNN global headquarters in Atlanta, I'm Carol Costello.

Thank you for joining us.

His new book blasts President Bush for botching the war on terror. Well, today former counter-terrorism czar Richard Clarke will air his complaints at a public hearing of the 9/11 Commission.

A military convoy comes under attack in Falluja, west of Baghdad. Two coalition soldiers are wounded, but their nationalities are unclear.

A specific threat shuts the U.S. Embassy in the United Arab Emirates. Reaction to the killing of Sheikh Ahmed Yassin may have led to the closing.

A memorial service begins next hour for the 190 people killed in the Spanish train bombings. Leaders from around the world are attending the state funeral.

And rescue crews are searching five states for a small plane carrying NASCAR fans. The plane has been missing since Sunday night.

We update the top stories every 15 minutes. The next news update comes your way at 5:15 Eastern.

It should be a dramatic day at the 9/11 Commission hearings. Here is the lineup. George Tenet, CIA chief under both the Clinton and Bush administrations, will kick off the testimony. He will be followed by Clinton's national security advisor, Samuel Berger. And then we'll hear from Richard Clarke, who worked for both Bush and Clinton as counter-terrorism director. His new book alleges Bush administration failures leading up to and following 9/11. Finally, Deputy Secretary of State Richard Armitage will appear. He takes the place of National Security Advisor Condoleezza Rice, who has refused to testify publicly.

You can sum up the previous day's 9/11 hearings in just five words -- we just didn't know enough.

CNN's David Ensor highlights the testimony on why the U.S. did not take out al Qaeda before 9/11.

(BEGIN VIDEOTAPE)

ENSOR (voice-over): The commission staff director told of at least three different times the CIA thought it had Osama bin Laden in its sights, once in particular at a desert camp in Afghanistan in February of '99 where bin Laden stayed for a week but there was a problem.

PHILLIP ZELIKOW, EXEC. DIR., 9/11 COMMISSION: According to CIA officials, policymakers were concerned about the danger that a strike might kill an Emirati prince or other senior officials who might be with bin Laden or close by.

ENSOR: The Clinton administration hesitated, Philip Zelikow says, because near bin Laden were senior men from the United Arab Emirates at a hunting camp and, before long, the opportunity was lost. Then Defense Secretary William Cohen insists there never was a clear shot at bin Laden.

WILLIAM COHEN, FMR. DEFENSE SECRETARY: If the director of Central Intelligence says we don't have it then you have to rely upon that.

ENSOR: The commissioners grilled both Clinton administration and Bush administration officials about why they didn't strike al Qaeda earlier.

BOB KERREY, 9/11 COMMISSION MEMBER: The fact that it's unpopular, that it's difficult, that our allies are not necessarily with it shouldn't deter a president who believes that what we have is a serial killer on our hands.

SLADE GORTON (R), COMMISSION MEMBER: What made you think even when you took over and got these first briefings, given the history of al Qaeda and its successful attacks on Americans that we had the luxury even of seven months before we could make any kind of response much less three years?

ENSOR: Secretary of Defense Rumsfeld said time for planning was needed that just firing off cruise missiles, as the Clinton administration did once, seemed pointless.

DONALD RUMSFELD, DEFENSE SECRETARY: You can hit their terrorist training camps over and over and over and expend millions of dollars in U.S. weapons against targets that are dirt and tents and accomplish next to nothing.

MADELEINE ALBRIGHT, FORMER SECRETARY OF STATE: We were mostly accused of over reacting not under reacting and I believe we reacted appropriately and, as I said earlier, we would have acted more had we had actionable intelligence.

(END VIDEOTAPE)

COSTELLO: White House officials are challenging Richard Clarke's credibility on several fronts. They've now released a copy of the letter Clarke wrote when he resigned as counter-terrorism chief in January of 2003. The letter makes no mention of the concerns Clarke writes about in his book. The letter also includes positive comments about President Bush.

Here are some excerpts. I'm going to read one to you. "It has been an enormous privilege," Clarke says, "to serve you these last 24 months. I will always remember the courage, determination, calm and leadership you demonstrated on September 11. I will also have fond memories of our briefings for you on cyber security and the intuitive understanding of its importance that you showed."

That's from Richard Clarke to President Bush.

Tonight, after his testimony, Richard Clarke will speak with Larry King. You can watch that on CNN at 9:00 p.m. Eastern.

And remember, you can follow our live hourly coverage of today's hearing. That will start at 9:00 a.m. Eastern. That's on the 9/11 Commission hearing. That's what I'm talking about there.

Israel and Hamas staring down each other this morning. Israel says it's actively targeting Hamas leadership. And there's a new man at the top of Hamas, Abdel Aziz Rantisi. He says he will follow the same path as his predecessor.

Live now to Gaza City and our Brent Sadler -- hello, Brent.

BRENT SADLER, CNN CORRESPONDENT: Hello.

Good morning, Carol.

Continuing military activity in southern Gaza. In the early hours of this morning, Israeli tanks led an incursion against the Khan Younis refugee camp. This after Palestinian militants had planted -- or, rather, attempted to plant a bomb in a Jewish settlement. Dozens of Palestinian homes destroyed.

In the wider regional context, a flare-up in violence across the border between Lebanon and northern Israel. Israeli air strikes against Hezbollah Monday, soon after the assassination of Sheikh Ahmed Yassin, followed by another strike against pmts from the Popular Front for the Liberation of Palestine general command, who fired, reportedly, mortars against Israeli settlements in northern Israel, provoking another Israeli air strike.

Now, on the Israeli staff side, continuing anxiety about the possibility of more suicide bombings against Israeli targets. In an opinion poll published in a top Israeli newspaper, some 60 percent of Israelis say they supported Prime Minister Ariel Sharon's decision to go ahead with targeted assassinations. But at least 80 percent of Israelis, it's reported, understand that this may lead to an escalate in violence with Hamas, causing, perhaps, more suicide bombings against Israeli targets.

Now, as far as the new leadership of Hamas is concerned, there has been a smooth transition of power. Abdel Aziz Rantisi has risen to the top here in Gaza after an election. He is a very able lieutenant of the assassinated leadership, Ahmed Yassin. In fact, he is a hardliner among a very hard-line, militant group.

Rantisi has been a very visible and popular figure here in Gaza and abroad and, in fact, he was the subject of an attempted assassination against him last June, when he escaped an Israeli missile strike, a man who knows that once again he must be in Israeli gun sights -- Carol.

COSTELLO: Brent Sadler reporting live from Gaza City this morning.

The Pledge of Allegiance begins our look at some of the news across America.

The Supreme Court will hear arguments today in the case of a California man who successfully sued to get the Pledge of Allegiance ruled unconstitutional. He objects to the phrase "under god." Only eight of the justices will hear the arguments. Justice Scalia has recused himself because he has already spoken out in favor of the Pledge.

No pain, no gain -- a 37-year-old New York man is suing Crunch Fitness for more than $1 million. He says their workout nearly killed him. The suit alleges that three days after the first session he was hospitalized with a kidney condition caused by extreme exertion. Crunch Fitness calls the man's claims highly suspect.

Today, off the coast of South Carolina, scientists will take another crack at freeing a tangled whale. The whale was discovered last week caught in fishing lines. Experts say if it isn't freed soon, the 34-foot endangered whale will surely die.

To the forecast center now to say good morning to Chad -- good morning.

CHAD MYERS, CNN CORRESPONDENT: Good morning, Carol.

They should have pleasant weather for that out there, too. You really don't want seas 16, 20 feet high when you're trying to -- when you're in an eight foot rubber boat trying to get this off the whale. So they should have pretty pleasant weather out there.

(WEATHER REPORT)

COSTELLO: All right, thank you, Chad.

MYERS: You're welcome.

COSTELLO: Still to come, pain at the pump. Find out how much gas prices are going to go up before they go down. Yes, they're going to rise even higher.

Plus, a $15,000 broken leg? Or what about getting a $100,000 hospital bill? It happens. Coming up, our special series on the middle class squeeze.

Also, bags of bagels, shelves of cereal -- are you confused about carbs? The good, the bad and the ugly on losing weight with America's latest diet obsession.

It is Wednesday, March 24th.

You are watching DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: 5:13 Eastern time.

Time to take a quick look at the top stories now.

Former White House terrorism advisor Richard Clarke testifies before the 9/11 Commission today. His new book blasts President Bush's leadership in fighting terrorism.

A government report says the Medicare system will go broke in the year 2019 if no changes are made to the current system. That's 11 years sooner than previously thought.

We now know why legendary singer Aretha Franklin is in the hospital. Her doctors say she had an allergic reaction to antibiotics, but she is getting better. The soul singer turns 62 tomorrow.

We update the top stories every 15 minutes. The next update comes your way at 5:30 Eastern.

All this week on DAYBREAK we are looking at the health care challenges facing middle class Americans. This morning, the unlevel playing field in our nation's hospitals. If you have insurance and you go to the hospital, you still may think your bill is too high. But if you don't have insurance, you may feel like you're the victim of price gouging.

CNN's Peter Viles has more for you.

(BEGIN VIDEOTAPE)

PETER VILES, CNN CORRESPONDENT (voice-over): Ed and Dianna Jellison are still paying the price for a trip to the hospital two years ago. Suffering from encephalitis, a viral infection, Ed was hospitalized 17 days.

JELLISON: My whole world had been turned completely upside down. We lost our business. My husband wasn't going to be the same again. Everything had changed.

VILES: They paid $30,000 in doctor's bills, but then another bill came from Florida Hospital, $116,000. The Jellisons had no health insurance. If they did, the insurance company would have been charged a fraction of that amount.

JELLISON: It makes me very mad, very mad.

VILES: But that's the way hospital billing works. List prices are wildly inflated, but insurance companies don't pay those high prices. Only the uninsured do.

K.B. FORBES, WWW.CONSEJOHELP.ORG: It is outrageous that they price-gouge a working-class, middle-class family here in the United States. It's all about greed. All they wanted to do was suck out the hard-earned assets of this family.

VILES: These are cases K.B. Forbes has analyzed. An appendectomy, the bill to Medicare would be $10,000, to an insurance company, $12,000, but if you are uninsured, $29,000. A broken leg cost Medicare $4,800. It costs an insurance company $5,400. Cost if you have no insurance, $15,000.

Still, the hospital industry says it loses money treating the uninsured.

CARMELA COYLE, AMERICAN HOSPITAL ASSOCIATION: We have 44 million Americans who have no health insurance coverage at all. And while they come to America's hospital emergency departments and are able to receive care, there is no payment that's ultimately received for many of those patients.

VILES: The Bush administration's point man on this, Tommy Thompson, is urging hospitals to offer discounts to the uninsured and some hospitals are doing so.

(END VIDEOTAPE)

COSTELLO: With more middle class Americans losing their coverage, health insurers have taken an aggressive approach to marketing to the uninsured. That story when our series resumes tomorrow on DAYBREAK.

Bill Gates waits in Brussels today. The European Commission announces its decision on Microsoft's alleged breaches of E.U. competition law. Microsoft could face fines of up to $650 million.

Live to Belgium. Actually, on the phone, our Jim Boulden on just what this means to Microsoft's Windows program -- what does it mean, Jim?

JIM BOULDEN, CNN CORRESPONDENT: Yes, hi, Carol.

What it means is that Microsoft is going to have to offer two operating systems -- one without Media Player, one with Media Player. The reason is is the European Commission feels that Microsoft uses its dominance in the operating system, X.P., by putting Media Player on there for free. And then when someone buys a computer from a store, they simply just go to Media Player and don't use Apple's Quick Time or don't use RealNetwork's RealPlayer. And those two have asked the European Commission to investigate.

For five years, the investigation has gone on. And the European Union says that Microsoft has been using its dominance in the operating system to abuse its power in other areas.

So we should be hearing in about an hour about that $600 million fine, which Microsoft says is far too much, and we should be hearing more about the RealPlayer.

COSTELLO: That is an incredibly hefty fine. You know, something similar took place here in the United States and, you know, it dwindled down to really Microsoft not having to do very much.

Might that happen in Europe, too?

BOULDEN: Well, there's two issues there. One is that you're absolutely right, Microsoft's competitors felt that Department of Justice did not do its job. It did not force Microsoft to level the playing field. So they came here to Europe to ask it to do the same thing.

We're going to hear whether or not the European Union expects Microsoft to behave differently worldwide or only in Europe. And Microsoft says the European Union should only tell it what to do in Europe. But the European Union is looking for a worldwide remedy and so is Microsoft's competitors.

As far as the fine goes, it's double what Microsoft says they thought it would be. Microsoft says that's completely unfair because they did not know they were breaking European law.

COSTELLO: Well, we'll see what happens.

Jim Boulden live from Belgium, on the phone with DAYBREAK this morning.

Coming up next on DAYBREAK...

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UNIDENTIFIED MALE: There's nothing you can do, really. You've just got to pay.

(END VIDEO CLIP)

COSTELLO: Oh, ain't that the truth? Feeling the pinch at the pump? Is there any relief in sight? No. We'll tell you why.

Up, up and away, a high flying fanatic sets the record straight.

This is DAYBREAK for Wednesday.

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COSTELLO: Time now to reach new heights in our DAYBREAK Eye- Opener.

A British man in Colorado says he set a new world record after reaching 42,000 feet in his hot air balloon. That would be nearly eight miles high. Hempleman-Adams made the climb in an open air wicker basket and says the temperature reached 75 degrees below zero at the highest altitude.

In the meantime, the FAA is investigating the flight and actually may charge him with driving his balloon without a license into restricted air space.

Holy mackerel -- I mean, buffalo head. It took a Wisconsin man about 45 minutes to pull in this monster of a fish. It's a large mouthed buffalo head fish, to be exact. The whopper weighed in at 73 pounds, one ounce, which breaks the world record by more than three pounds. Ooh, that's a big fish.

If you enjoyed playing dodge ball as a kid, you are not alone. Adult dodge ball leagues like this one in Portland, Oregon have begun springing up all over the country. Included in the resurgence is a Hollywood dodge ball movie starring Ben Stiller. It hits theaters in June.

Wasn't that a cool game in school, where people just heaved the ball at the less popular kids as hard as they could?

MYERS: I believe that was the point.

COSTELLO: That is so wrong.

MYERS: Well, I...

COSTELLO: It's just so wrong.

MYERS: I believe that's how it went. And then if you caught the ball and somebody else got to come back in. That was progressive dodge ball.

COSTELLO: Oh, thanks for explaining that, Chad.

MYERS: Sure. I remember -- that was only 41 years ago. I remember it vividly.

Good morning, Carol.

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COSTELLO: Thank you, Chad.

MYERS: You're welcome.

COSTELLO: We're used to expecting gas prices to go up by Memorial Day. But, ouch, they are already here. Per gallon prices nationwide have reached a record high, almost $1.74. The previous record was set in August of last summer, when the price was almost $1.74 per gallon.

Our Jen Rogers has more on the pump shock.

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JEN ROGERS, CNN CORRESPONDENT (voice-over): It's a record few Americans will cheer, gasoline prices peaking at a new all time high Tuesday, the nationwide average nearly $1.74 per gallon.

UNIDENTIFIED MALE: There's nothing you can do, really. You just got to pay.

ROGERS: And paying can be painful from coast to coast. AAA reports the highest prices are in California, coming in at $2.14 a gallon. Move east and it doesn't get much better, Arizona $1.91, New York $1.86, Florida $1.77.

ROBERT SINCLAIR, AAA: Usually at this time of year record low prices and we usually don't see higher prices until the Memorial Day weekend which signals the beginning of the summer driving season. The fact that this is happening now is a big deal because really prices should be much lower.

ROGERS: In fact, the government isn't predicting relief around the corner, forecasting gas prices will jump another ten cents a gallon this spring. The problem a lesson in Economics 101, high demand here in the U.S. and booming China facing off against tight supply thanks to OPEC and older refineries struggling with capacity.

Add to the costly mix a seasonal slowdown from refiners shifting to special blends of cleaner burning gas that doesn't cause as much air pollution during the hot summer months.

UNIDENTIFIED MALE: It's a real big hassle, really big hassle.

ROGERS: Even with pump prices at an all time high, on relative terms adjusted for inflation $1.74 is cheap. In 1980, gas cost more than $2.50 in 2004 dollars.

(END VIDEOTAPE)

COSTELLO: And we will talk more about these record prices in the next hour of DAYBREAK with AAA's Montill Williams. He will join us to talk about why and how much higher gas prices will go when we really start driving into the summer.

In the next half hour of DAYBREAK...

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UNIDENTIFIED CHILDREN: ... the United States of America.

(END VIDEO CLIP)

COSTELLO: "Under god" under fire -- the Supreme Court hears from a man who wants to ban the words "under god" from the Pledge of Allegiance.

And violence erupts west of Baghdad as Iraqis count down the transfer of power. We'll have a live report for you out of Baghdad straight ahead.

And are you confused about carbs? What's a good carb, what's a bad carb? Dr. Sanjay Gupta to the rescue, straight ahead.

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