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CNN Live At Daybreak

Baghdad Blast; Bleak Outlook; Pensions Bailout; Ivan Batters Georgia; No Slaves to Fashion

Aired September 17, 2004 - 05:30   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: A suicide bomber detonates a car packed with explosives. It happened this morning in downtown Baghdad.
It is Friday, September 17. This is DAYBREAK.

And good morning, and welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

"Now in the News."

A suicide car bomb explodes in Baghdad. It happened just about an hour ago. We have just confirmed it. The blast went off near an Iraqi police convoy in central Baghdad. Iraqi police say there are numerous casualties, including police and civilians.

A U.S. airstrike in the Iraqi city of Fallujah kills 60 foreign fighters. Coalition officials say the strike hit a terrorist meeting site as insurgents linked to terror mastermind Abu Musab al-Zarqawi.

The U.N. Security Council expected to take up a U.S.-led draft resolution on Sudan today or tomorrow. It demands the Sudanese government stop the violence in the Darfur region where tens of thousands of civilians have been killed.

Two new polls give a widely different snapshot in the presidential race. A Gallup poll shows President Bush with a 55 to 42 percent lead over Senator Kerry among likely voters. But a Pew Research Center poll shows the two tied at 46 percent.

To the Forecast Center now and Chad.

Good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

There is breaking news to tell you about out of Iraq this morning. A suicide car bomb explodes in central Baghdad, numerous casualties. There may be even some deaths.

Let's head live to Baghdad to find out more and CNN's Diana Muriel. What happened -- Diana?

DIANA MURIEL, CNN CORRESPONDENT: Well, Carol, the relative peace of the Islamic day of rest shattered this Friday by yet another car bomb here in central Baghdad. The explosion took place in the al- Rasheed district in the center of town, a very busy commercial district.

What happened was that a car carrying a bomb came up alongside a convoy of Iraqi police vehicles that were moving along the street. There were six vehicles in the convoy. The bomb was detonated, and the casualties have been enormous, both the Iraqi police and Iraqi civilians. The initial estimates, and I stress that they are only estimates at this stage, are that 20 people have been killed and more than 40 wounded in this massive explosion.

Just a mile away, the U.S. troops were manning a checkpoint, managed to foil another attempt at a car bomb. This was when a car tried to run the checkpoint. U.S. soldiers shot at the car and they killed the two would-be car bombers inside the vehicle. This was in Hiffa Street, this now notorious street, which is known amongst Americans as Little Fallujah.

So one successful attempt, one unsuccessful attempt at a car bomb here in Baghdad. Yet more deaths, yet more injured -- Carol.

COSTELLO: Diana Muriel reporting live from Baghdad this morning.

The escalating violence in Iraq is something U.S. intelligence anticipated and warned President Bush about in a classified report. The document offers a grim assessment of Iraq's future.

CNN's senior Pentagon correspondent Jamie McIntyre has details for you.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): The fact that things have gone from bad to worse in Iraq should not come as a surprise to President Bush.

Sources confirm to CNN that a highly pessimistic national intelligence estimate was sent to the White House back in July. The classified warning predicted the best case for Iraq, tenuous stability, the worst case civil war. Despite the gloomy secret forecast, President Bush continues to argue publicly the U.S. is making good progress in Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll get them on the path of stability and democracy as quickly as possible and then our troops will return home with the honor they have earned.

MCINTYRE: But six weeks after President Bush got the bleak prediction, it seems to be coming true. The Pentagon now admits the insurgency in Iraq is growing in both size and sophistication and, as a result, the number of U.S. war dead, now over 1,025, is climbing at a faster rate than at any time since major combat.

In visits to troops at U.S. bases this week, Defense Secretary Donald Rumsfeld found himself answering questions about why Iraq seems to be taking a turn for the worse.

DONALD RUMSFELD, DEFENSE SECRETARY: It's a tough business and, as you know from reading the papers and seeing the television, it's a dangerous business and a great many of you know that from being there personally.

MCINTYRE: Sources say the intelligence report raises serious questions about Iraq's ability to achieve political solutions in the next year or two, noting the country's limited experience with representative government and history of violence.

FRANK FUKUYAMA, MILITARY HISTORIAN: I think that anybody that thinks that you can hold elections in the Sunni Triangle by the end of January is really smoking something.

MCINTYRE (on camera): A senior defense official called the negative assessment one view but it's a view that's increasing being held by experts in and out of the Pentagon who worry the U.S. military is becoming trapped in a no win situation where the harder it hits the insurgents, the stronger they become.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COSTELLO: Let's get more on this intelligence report on Iraq's future. For that we turn to intelligence and security expert Will Geedes. He is managing director of Group International Corporation Protection. He joins us live from London this morning.

Good morning.

WILL GEEDES, GROUP INTL. CORP. PROTECTION: Good morning.

COSTELLO: So what is your assessment, is the situation as grim as this report makes it out to be?

GEEDES: I think the situation is probably even worse than that. We have seen an increasing escalation to problems. And one of the biggest issues is the fact that it's very, very difficult to determine when particular attacks or areas are going to get worse.

COSTELLO: So what should the United States military do? Some Democrats charge that they are not taking more aggressive military action because of the upcoming presidential election here in the United States.

GEEDES: Well a very fine balance is going to have to be struck here. By taking a more aggressive stance, I don't think that's necessarily going to have any greater or better effect to calming the situation. One of the biggest problems in Iraq, at the moment, is you have so many different small groups of insurgents who all have different agendas to promote. I think the only solution has got to be to training up the Iraqis, building their resilience and their skillsets to dealing with their own problems.

COSTELLO: But is that happening?

GEEDES: It is, but it's going to take time. You cannot make an individual with a base knowledge of very, very little an expert overnight. It's going to take a progressive period to be able to build those skills and those capabilities for them to be able to manage their own civil disorder.

COSTELLO: You know the big fear is that this will end up in a civil war. You know we were trying to think of what exactly the definition of a civil war is and what should we look for to determine if a civil war is indeed taking place within Iraq?

GEEDES: Well I would say, you know having returned quite recently, that a civil war of sorts is already in place. How we generally would operate or many other people would operate down there is, in fact, in assessing intelligence reports on local areas on a daily basis. However, the unpredictability of how the insurgents are operating means that situations can not only change from day to day but hour by hour.

COSTELLO: Do you think that there will be elections in January?

GEEDES: I think there could be an attempt or an endeavor to actually have those elections, but I think we're going to see the situation get far worse there before it gets better. And therefore, I think it's going to be very difficult for any democratic elections really to be held there.

COSTELLO: Will Geedes, Managing Director of Group International Corporation Protection, thank you for joining DAYBREAK this morning.

Ivan is no longer a hurricane or even a tropical depression, still, it presents a danger. In less than 10 minutes, we'll show you what Ivan did far beyond the Gulf Coast where it came ashore.

And parents, in the next hour of DAYBREAK, we'll have some interesting revelations about the effect television is having on your children.

But first, here is a look at what else is making news this Friday morning.

(COMMERCIAL BREAK)

COSTELLO: Retirement is something we all look forward to someday and we hope our pension plans will still be there when we need them. But a category five financial storm may be on the horizon. Businesses, in an effort to protect their own bottom line, may be putting our pensions at risk.

CNN's Ceci Rodgers has more for you.

(BEGIN VIDEOTAPE)

CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): The agency that guarantees 44 million pensions, the Pension Benefit Guarantee Corporation, is running out of money, and it's only a matter of time before taxpayers have to foot the bill for a massive bailout.

DOUGLAS ELLIOTT, CTR. ON FEDERAL FINANCIAL INST.: Bottom line is we have a serious problem. It's just going to get worse the longer we wait.

RODGERS: The Center on Federal Financial Institutions says under current conditions, the PBGC will be broke by the year 2020 and will require a $50 billion bailout. But the scenario worsens if airline pensions default, the money runs out by 2018 and the price tag on a bailout rises to $109 billion. That would be the biggest government bailout since the S&L crisis of the early '90s, which cost taxpayers more than $150 billion. A pension bailout could be avoided, the study's author says, by taking action now, including raising the premiums companies pay into the system.

ELLIOTT: There's been a significant disproportion for 30 years now between the level of risk PBGC takes on and the premiums they charge. There hasn't been a single study that shows that premiums are even half of what they would have to be to balance that.

RODGERS: Higher premiums may only be part of the answer, especially if American companies continue to shut down or freeze their traditional pension plans in favor of defined contribution plans, such as 401(k)s that are less expensive for them in the long run.

BOB KORAJCZYK, NORTHWESTERN UNIVERSITY: As well funded plans leave the system and poorly funded plans stay in the system, there is going to be more and more pressure on the Pension Benefits Guarantee Corporation as these plans get turned over to them.

RODGERS: In fact, the PBGC says only 20 percent of today's workers have a traditional pension compared with 40 percent in the mid-'80s.

(on camera): This week the PBGC asked Congress for more legal powers to seize the bankrupt assets of companies that abandon their pensions, for example, and to force healthy companies to fully fund their pensions so that taxpayers don't have to pick up the tab when pensions fail.

Ceci Rodgers, CNN Financial News, Chicago.

(END VIDEOTAPE)

COSTELLO: Your news, money, weather and sports. It's 5:46 Eastern. Here is what's all new this morning.

Sixty so-called foreign fighters are killed in a U.S. airstrike on Fallujah. Coalition officials say the strike targeted a terrorist meeting site of insurgents loyal to terror leader Abu Musab al- Zarqawi. Grand jury report into the Columbine High School massacre indicates authorities in Colorado withheld important documents. Those documents indicate deputies knew one of the killers made death threats and built pipe bombs two years before the shootings.

In money news, oil traders are watching Tropical Storm Jeanne. Concerns over nasty weather in the Gulf of Mexico are affecting prices. U.S. light crude oil prices rose 24 cents today to $44.12 a barrel.

In culture, the Olsen twins are selling French fries in France. Mary-Kate and Ashley are part of a McDonald's promotion that gives customers photo albums or denim bags. We don't know if either of them actually eats a French fry.

In sports, the 35th Ryder Cup tees off today. The Europeans won the last match, but the Americans are hoping to come on strong. They have Tiger Woods and Phil Mickelson teaming up in the first pairing -- Chad.

MYERS: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

Those are the latest headlines for you.

Even though Ivan has been downgraded to a tropical storm, it landed a devastating blow in Georgia. The storm killed three people, knocked out power and spawned tornadoes throughout the state.

Marc Teichner of our Atlanta affiliate WAGA joins us live from Franklin County.

Good morning.

MARC TEICHNER, WAGA-TV REPORTER: Well good morning, and we are in Franklin County. Franklin Springs, to be exact, small town in northeast Georgia.

Take a look at the town hall behind you, behind us. I'm going to light it up for you so you can see what is left of this place. This is a complete wreck as to what happened. In the back you can see there is still a fire truck that is stuck back there. They are being told that they won't be able to get that fire truck out. It is a complete loss. It took them years to get this thing set up, they tell us, and only took them seconds to watch it all go away.

(BEGIN VIDEOTAPE)

TEICHNER (voice-over): Ivan's fury left a path of destruction here in northeast Georgia. Just take a look at the debris in this yard. Tornadoes ripped through Franklin and Madison counties late yesterday afternoon. A mangled mess is all that remains at this location. But the real tragedy is what happened across the street where a tree fell on an SUV killing a man.

The storm tore apart Bonnie Patrick's (ph) house. Luckily, she wasn't home at the time.

BONNIE PATRICK, HOMEOWNER: When I got right up here, that tractor trailer truck was laying over on its side. And I was first looking at that, and then I saw this and you know my heart just stopped.

TEICHNER: Her next door neighbor happens to be her mom who tells us she just fixed her roof when Frances came through. Now she's understandably still shaken up.

UNIDENTIFIED FEMALE: And I was -- I just started crying and I was just jerking all over. My legs was, my knees just likely turned to water.

UNIDENTIFIED MALE: Everything we worked 17 years to build up, that I've been here, is now in shambles.

TEICHNER: In downtown Franklin Springs, population 750, the storm destroyed the town hall, which also serves as the police and fire department.

UNIDENTIFIED MALE: Devastating. Devastating. We just built this, all these new trucks and stuff since last year in November. And to have them damaged and our ladder truck stuck in the back bay, it's devastating.

(END VIDEOTAPE)

TEICHNER: Certainly is devastating. This is some of the debris that is left over. This is the stuff that came out of the front of the town hall. All of this stuff taken out overnight and moved to the side of the road.

As for that truck, that fire truck that they had, that was a $165,000 truck. They just got it last year and now they are going to have to replace it.

We are -- yes, pretty rough time for them. Can tell you that a number of the homes also destroyed in this particular area where we are at. We just found out that they had to move a family out at 2:00 in the morning because a tree is going to be going through their house at anytime they are saying.

COSTELLO: You mean the tree is just hanging there precariously?

TEICHNER: It's precariously on top of the house, and they say that it's going to eventually crash through and has pretty much destroyed that house. And so they had to move those folks out. In fact, we were told that the owner of the house just finished renovating the place only a couple of weeks ago.

COSTELLO: Marc Teichner, from WAGA, joining us live from Franklin County, Georgia, thank you. It's no longer a hurricane but Ivan's fury can be seen for miles. Coming up in the next hour of DAYBREAK, we'll take you live to Pensacola for the latest on the devastation there.

You're watching DAYBREAK.

(COMMERCIAL BREAK)

COSTELLO: Happy birthday.

New York's fashion week is filled with overly expensive clothes and even more expensive models. But when it's all said and done, one group gets first crack at the leftovers.

CNN's Jeanne Moos looks at a different kind of fashion show for the working world.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): You know how runway models sometimes take it off. Well maybe these models should have left it on. These are the ones who work behind the scenes, from dressers, to carpenters, they make the real fashion shows possible.

UNIDENTIFIED MALE: We do all the dirty work.

MOOS: And in an end to fashion week ritual, they erect a runway on a midtown Manhattan street and dress up in...

UNIDENTIFIED MALE: Any leftover crap we've got laying around the place.

MOOS: Skip the silk taffeta and chiffon, the latest trends are duct tape and packing blankets.

UNIDENTIFIED MALE: It's tarp. It's made out of tarp, actually. It's a tour (ph).

UNIDENTIFIED MALE: She's going to be wearing a bubble wrap straightjacket.

MOOS: There it is, worn with duct tape hot pants that have been modified in the rear.

The theme this season is butt cheeks, hence the chant...

UNIDENTIFIED MALE: Bottoms up.

CROWD: Bottoms up.

UNIDENTIFIED MALE: Do you mind if it goes across your crack a little bit?

UNIDENTIFIED FEMALE: Sweetheart, you do whatever you want.

UNIDENTIFIED MALE: Thank you. UNIDENTIFIED FEMALE: I think you're the first man that's ever asked.

UNIDENTIFIED MALE: That's right, that's right.

MOOS: Sure they are mocking the fashion world, but as the show's creative director demonstrates,...

UNIDENTIFIED MALE: It's all about having fun.

MOOS: And though light fixtures probably don't have a fashion future, glandiers (ph) might. Those cords used to hang ID around the neck. The real shows may have Paris Hilton in attendance, but this crowd plays it to the hilt. You can't stuff bills into some Ralph Lauren model. And if you think real models are too skinny, at least here you won't have a bone to pick.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

COSTELLO: That was pretty clever.

We'll be right back.

(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 September 17, 2004 - 05:30   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: A suicide bomber detonates a car packed with explosives. It happened this morning in downtown Baghdad.
It is Friday, September 17. This is DAYBREAK.

And good morning, and welcome to the second half-hour of DAYBREAK. From the CNN Global Headquarters in Atlanta, I'm Carol Costello.

"Now in the News."

A suicide car bomb explodes in Baghdad. It happened just about an hour ago. We have just confirmed it. The blast went off near an Iraqi police convoy in central Baghdad. Iraqi police say there are numerous casualties, including police and civilians.

A U.S. airstrike in the Iraqi city of Fallujah kills 60 foreign fighters. Coalition officials say the strike hit a terrorist meeting site as insurgents linked to terror mastermind Abu Musab al-Zarqawi.

The U.N. Security Council expected to take up a U.S.-led draft resolution on Sudan today or tomorrow. It demands the Sudanese government stop the violence in the Darfur region where tens of thousands of civilians have been killed.

Two new polls give a widely different snapshot in the presidential race. A Gallup poll shows President Bush with a 55 to 42 percent lead over Senator Kerry among likely voters. But a Pew Research Center poll shows the two tied at 46 percent.

To the Forecast Center now and Chad.

Good morning.

CHAD MYERS, CNN METEOROLOGIST: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

There is breaking news to tell you about out of Iraq this morning. A suicide car bomb explodes in central Baghdad, numerous casualties. There may be even some deaths.

Let's head live to Baghdad to find out more and CNN's Diana Muriel. What happened -- Diana?

DIANA MURIEL, CNN CORRESPONDENT: Well, Carol, the relative peace of the Islamic day of rest shattered this Friday by yet another car bomb here in central Baghdad. The explosion took place in the al- Rasheed district in the center of town, a very busy commercial district.

What happened was that a car carrying a bomb came up alongside a convoy of Iraqi police vehicles that were moving along the street. There were six vehicles in the convoy. The bomb was detonated, and the casualties have been enormous, both the Iraqi police and Iraqi civilians. The initial estimates, and I stress that they are only estimates at this stage, are that 20 people have been killed and more than 40 wounded in this massive explosion.

Just a mile away, the U.S. troops were manning a checkpoint, managed to foil another attempt at a car bomb. This was when a car tried to run the checkpoint. U.S. soldiers shot at the car and they killed the two would-be car bombers inside the vehicle. This was in Hiffa Street, this now notorious street, which is known amongst Americans as Little Fallujah.

So one successful attempt, one unsuccessful attempt at a car bomb here in Baghdad. Yet more deaths, yet more injured -- Carol.

COSTELLO: Diana Muriel reporting live from Baghdad this morning.

The escalating violence in Iraq is something U.S. intelligence anticipated and warned President Bush about in a classified report. The document offers a grim assessment of Iraq's future.

CNN's senior Pentagon correspondent Jamie McIntyre has details for you.

(BEGIN VIDEOTAPE)

JAMIE MCINTYRE, CNN SR. PENTAGON CORRESPONDENT (voice-over): The fact that things have gone from bad to worse in Iraq should not come as a surprise to President Bush.

Sources confirm to CNN that a highly pessimistic national intelligence estimate was sent to the White House back in July. The classified warning predicted the best case for Iraq, tenuous stability, the worst case civil war. Despite the gloomy secret forecast, President Bush continues to argue publicly the U.S. is making good progress in Iraq.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We'll get them on the path of stability and democracy as quickly as possible and then our troops will return home with the honor they have earned.

MCINTYRE: But six weeks after President Bush got the bleak prediction, it seems to be coming true. The Pentagon now admits the insurgency in Iraq is growing in both size and sophistication and, as a result, the number of U.S. war dead, now over 1,025, is climbing at a faster rate than at any time since major combat.

In visits to troops at U.S. bases this week, Defense Secretary Donald Rumsfeld found himself answering questions about why Iraq seems to be taking a turn for the worse.

DONALD RUMSFELD, DEFENSE SECRETARY: It's a tough business and, as you know from reading the papers and seeing the television, it's a dangerous business and a great many of you know that from being there personally.

MCINTYRE: Sources say the intelligence report raises serious questions about Iraq's ability to achieve political solutions in the next year or two, noting the country's limited experience with representative government and history of violence.

FRANK FUKUYAMA, MILITARY HISTORIAN: I think that anybody that thinks that you can hold elections in the Sunni Triangle by the end of January is really smoking something.

MCINTYRE (on camera): A senior defense official called the negative assessment one view but it's a view that's increasing being held by experts in and out of the Pentagon who worry the U.S. military is becoming trapped in a no win situation where the harder it hits the insurgents, the stronger they become.

Jamie McIntyre, CNN, the Pentagon.

(END VIDEOTAPE)

COSTELLO: Let's get more on this intelligence report on Iraq's future. For that we turn to intelligence and security expert Will Geedes. He is managing director of Group International Corporation Protection. He joins us live from London this morning.

Good morning.

WILL GEEDES, GROUP INTL. CORP. PROTECTION: Good morning.

COSTELLO: So what is your assessment, is the situation as grim as this report makes it out to be?

GEEDES: I think the situation is probably even worse than that. We have seen an increasing escalation to problems. And one of the biggest issues is the fact that it's very, very difficult to determine when particular attacks or areas are going to get worse.

COSTELLO: So what should the United States military do? Some Democrats charge that they are not taking more aggressive military action because of the upcoming presidential election here in the United States.

GEEDES: Well a very fine balance is going to have to be struck here. By taking a more aggressive stance, I don't think that's necessarily going to have any greater or better effect to calming the situation. One of the biggest problems in Iraq, at the moment, is you have so many different small groups of insurgents who all have different agendas to promote. I think the only solution has got to be to training up the Iraqis, building their resilience and their skillsets to dealing with their own problems.

COSTELLO: But is that happening?

GEEDES: It is, but it's going to take time. You cannot make an individual with a base knowledge of very, very little an expert overnight. It's going to take a progressive period to be able to build those skills and those capabilities for them to be able to manage their own civil disorder.

COSTELLO: You know the big fear is that this will end up in a civil war. You know we were trying to think of what exactly the definition of a civil war is and what should we look for to determine if a civil war is indeed taking place within Iraq?

GEEDES: Well I would say, you know having returned quite recently, that a civil war of sorts is already in place. How we generally would operate or many other people would operate down there is, in fact, in assessing intelligence reports on local areas on a daily basis. However, the unpredictability of how the insurgents are operating means that situations can not only change from day to day but hour by hour.

COSTELLO: Do you think that there will be elections in January?

GEEDES: I think there could be an attempt or an endeavor to actually have those elections, but I think we're going to see the situation get far worse there before it gets better. And therefore, I think it's going to be very difficult for any democratic elections really to be held there.

COSTELLO: Will Geedes, Managing Director of Group International Corporation Protection, thank you for joining DAYBREAK this morning.

Ivan is no longer a hurricane or even a tropical depression, still, it presents a danger. In less than 10 minutes, we'll show you what Ivan did far beyond the Gulf Coast where it came ashore.

And parents, in the next hour of DAYBREAK, we'll have some interesting revelations about the effect television is having on your children.

But first, here is a look at what else is making news this Friday morning.

(COMMERCIAL BREAK)

COSTELLO: Retirement is something we all look forward to someday and we hope our pension plans will still be there when we need them. But a category five financial storm may be on the horizon. Businesses, in an effort to protect their own bottom line, may be putting our pensions at risk.

CNN's Ceci Rodgers has more for you.

(BEGIN VIDEOTAPE)

CECI RODGERS, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): The agency that guarantees 44 million pensions, the Pension Benefit Guarantee Corporation, is running out of money, and it's only a matter of time before taxpayers have to foot the bill for a massive bailout.

DOUGLAS ELLIOTT, CTR. ON FEDERAL FINANCIAL INST.: Bottom line is we have a serious problem. It's just going to get worse the longer we wait.

RODGERS: The Center on Federal Financial Institutions says under current conditions, the PBGC will be broke by the year 2020 and will require a $50 billion bailout. But the scenario worsens if airline pensions default, the money runs out by 2018 and the price tag on a bailout rises to $109 billion. That would be the biggest government bailout since the S&L crisis of the early '90s, which cost taxpayers more than $150 billion. A pension bailout could be avoided, the study's author says, by taking action now, including raising the premiums companies pay into the system.

ELLIOTT: There's been a significant disproportion for 30 years now between the level of risk PBGC takes on and the premiums they charge. There hasn't been a single study that shows that premiums are even half of what they would have to be to balance that.

RODGERS: Higher premiums may only be part of the answer, especially if American companies continue to shut down or freeze their traditional pension plans in favor of defined contribution plans, such as 401(k)s that are less expensive for them in the long run.

BOB KORAJCZYK, NORTHWESTERN UNIVERSITY: As well funded plans leave the system and poorly funded plans stay in the system, there is going to be more and more pressure on the Pension Benefits Guarantee Corporation as these plans get turned over to them.

RODGERS: In fact, the PBGC says only 20 percent of today's workers have a traditional pension compared with 40 percent in the mid-'80s.

(on camera): This week the PBGC asked Congress for more legal powers to seize the bankrupt assets of companies that abandon their pensions, for example, and to force healthy companies to fully fund their pensions so that taxpayers don't have to pick up the tab when pensions fail.

Ceci Rodgers, CNN Financial News, Chicago.

(END VIDEOTAPE)

COSTELLO: Your news, money, weather and sports. It's 5:46 Eastern. Here is what's all new this morning.

Sixty so-called foreign fighters are killed in a U.S. airstrike on Fallujah. Coalition officials say the strike targeted a terrorist meeting site of insurgents loyal to terror leader Abu Musab al- Zarqawi. Grand jury report into the Columbine High School massacre indicates authorities in Colorado withheld important documents. Those documents indicate deputies knew one of the killers made death threats and built pipe bombs two years before the shootings.

In money news, oil traders are watching Tropical Storm Jeanne. Concerns over nasty weather in the Gulf of Mexico are affecting prices. U.S. light crude oil prices rose 24 cents today to $44.12 a barrel.

In culture, the Olsen twins are selling French fries in France. Mary-Kate and Ashley are part of a McDonald's promotion that gives customers photo albums or denim bags. We don't know if either of them actually eats a French fry.

In sports, the 35th Ryder Cup tees off today. The Europeans won the last match, but the Americans are hoping to come on strong. They have Tiger Woods and Phil Mickelson teaming up in the first pairing -- Chad.

MYERS: Good morning, Carol.

(WEATHER REPORT)

COSTELLO: Thank you, Chad.

Those are the latest headlines for you.

Even though Ivan has been downgraded to a tropical storm, it landed a devastating blow in Georgia. The storm killed three people, knocked out power and spawned tornadoes throughout the state.

Marc Teichner of our Atlanta affiliate WAGA joins us live from Franklin County.

Good morning.

MARC TEICHNER, WAGA-TV REPORTER: Well good morning, and we are in Franklin County. Franklin Springs, to be exact, small town in northeast Georgia.

Take a look at the town hall behind you, behind us. I'm going to light it up for you so you can see what is left of this place. This is a complete wreck as to what happened. In the back you can see there is still a fire truck that is stuck back there. They are being told that they won't be able to get that fire truck out. It is a complete loss. It took them years to get this thing set up, they tell us, and only took them seconds to watch it all go away.

(BEGIN VIDEOTAPE)

TEICHNER (voice-over): Ivan's fury left a path of destruction here in northeast Georgia. Just take a look at the debris in this yard. Tornadoes ripped through Franklin and Madison counties late yesterday afternoon. A mangled mess is all that remains at this location. But the real tragedy is what happened across the street where a tree fell on an SUV killing a man.

The storm tore apart Bonnie Patrick's (ph) house. Luckily, she wasn't home at the time.

BONNIE PATRICK, HOMEOWNER: When I got right up here, that tractor trailer truck was laying over on its side. And I was first looking at that, and then I saw this and you know my heart just stopped.

TEICHNER: Her next door neighbor happens to be her mom who tells us she just fixed her roof when Frances came through. Now she's understandably still shaken up.

UNIDENTIFIED FEMALE: And I was -- I just started crying and I was just jerking all over. My legs was, my knees just likely turned to water.

UNIDENTIFIED MALE: Everything we worked 17 years to build up, that I've been here, is now in shambles.

TEICHNER: In downtown Franklin Springs, population 750, the storm destroyed the town hall, which also serves as the police and fire department.

UNIDENTIFIED MALE: Devastating. Devastating. We just built this, all these new trucks and stuff since last year in November. And to have them damaged and our ladder truck stuck in the back bay, it's devastating.

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TEICHNER: Certainly is devastating. This is some of the debris that is left over. This is the stuff that came out of the front of the town hall. All of this stuff taken out overnight and moved to the side of the road.

As for that truck, that fire truck that they had, that was a $165,000 truck. They just got it last year and now they are going to have to replace it.

We are -- yes, pretty rough time for them. Can tell you that a number of the homes also destroyed in this particular area where we are at. We just found out that they had to move a family out at 2:00 in the morning because a tree is going to be going through their house at anytime they are saying.

COSTELLO: You mean the tree is just hanging there precariously?

TEICHNER: It's precariously on top of the house, and they say that it's going to eventually crash through and has pretty much destroyed that house. And so they had to move those folks out. In fact, we were told that the owner of the house just finished renovating the place only a couple of weeks ago.

COSTELLO: Marc Teichner, from WAGA, joining us live from Franklin County, Georgia, thank you. It's no longer a hurricane but Ivan's fury can be seen for miles. Coming up in the next hour of DAYBREAK, we'll take you live to Pensacola for the latest on the devastation there.

You're watching DAYBREAK.

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COSTELLO: Happy birthday.

New York's fashion week is filled with overly expensive clothes and even more expensive models. But when it's all said and done, one group gets first crack at the leftovers.

CNN's Jeanne Moos looks at a different kind of fashion show for the working world.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): You know how runway models sometimes take it off. Well maybe these models should have left it on. These are the ones who work behind the scenes, from dressers, to carpenters, they make the real fashion shows possible.

UNIDENTIFIED MALE: We do all the dirty work.

MOOS: And in an end to fashion week ritual, they erect a runway on a midtown Manhattan street and dress up in...

UNIDENTIFIED MALE: Any leftover crap we've got laying around the place.

MOOS: Skip the silk taffeta and chiffon, the latest trends are duct tape and packing blankets.

UNIDENTIFIED MALE: It's tarp. It's made out of tarp, actually. It's a tour (ph).

UNIDENTIFIED MALE: She's going to be wearing a bubble wrap straightjacket.

MOOS: There it is, worn with duct tape hot pants that have been modified in the rear.

The theme this season is butt cheeks, hence the chant...

UNIDENTIFIED MALE: Bottoms up.

CROWD: Bottoms up.

UNIDENTIFIED MALE: Do you mind if it goes across your crack a little bit?

UNIDENTIFIED FEMALE: Sweetheart, you do whatever you want.

UNIDENTIFIED MALE: Thank you. UNIDENTIFIED FEMALE: I think you're the first man that's ever asked.

UNIDENTIFIED MALE: That's right, that's right.

MOOS: Sure they are mocking the fashion world, but as the show's creative director demonstrates,...

UNIDENTIFIED MALE: It's all about having fun.

MOOS: And though light fixtures probably don't have a fashion future, glandiers (ph) might. Those cords used to hang ID around the neck. The real shows may have Paris Hilton in attendance, but this crowd plays it to the hilt. You can't stuff bills into some Ralph Lauren model. And if you think real models are too skinny, at least here you won't have a bone to pick.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)

COSTELLO: That was pretty clever.

We'll be right back.

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