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CNN Live At Daybreak

Bloody Friday in Iraq; War Of Words; Tax Changes

Aired November 18, 2005 - 06:29   ET

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

KELLY WALLACE, CNN ANCHOR: And good Friday morning, everyone. I'm Kelly Wallace, in today for Carol Costello. Thanks so much for starting your day with us.
Coming up this half-hour, dozens are dead following several suicide attacks in Iraq. We'll be going there live.

And the debate heating up over troops and the mission in the Middle East.

All of that ahead. But first, these stories "Now in the News."

In Baghdad, a camera captures a moment of a huge explosion. This is one of two suicide car bombings in the capital. The blast killing at least six people.

And in eastern Iraq, two more suicide bombers walked into a Shia mosque and set off their bombs. At least 50 people were killed there.

Scores of people have been hurt in both locations. Again, a live report from Baghdad in just minutes.

The Army and Marines are recalled body armor vests that failed ballistic tests. It's unknown how many of the 18,000 vests are being used by troops in Iraq and Afghanistan. It is the second time this year the Marines have had to shelve defective vests.

And Dana Reeve says the Christopher Reeve Paralysis Foundation is $2 million richer today. That's after last night's fund-raising gala in New York City. Michael Douglas and Catherine Zeta-Jones were recognized with the Spirit of Courage Award.

And Jacqui Jeras in the forecast center now.

(WEATHER REPORT)

WALLACE: And now our top story this half-hour, yet another in a seemingly endless string of attacks. These attacks today killing dozens in Iraq.

Our Nic Robertson is in the Iraqi capital following a number of developments.

Nic, thanks for joining us. What's the latest from there?

NIC ROBERTSON, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, Kelly, good morning. The very latest, the deadliest attacks occurring just a couple of hours ago. About 85 miles northeast of Baghdad, two suicide bombers walked into two different mosques, detonated their explosives. They chose the busiest time of the week in the mosques.

Today is Friday, the holy day, the noontime prayers that they were targeting, the busiest prayers of the day, the busiest prayers of the week. Fifty people there, according to U.S. officials, have been dead. We also understand from Iraqi police that there are many, many wounded.

Earlier in the day in Baghdad, just after 8:00 in the morning, two suicide bombers driving vehicles laden with explosives targeted a hotel that's used by western expatriate workers and western journalists. You can see this white van. It drives up to the concrete barrier outside the al-Hamra Hotel, detonates the explosives, appearing to try to blow a hole in that defensive wall around the hotel.

A second vehicle about 20 seconds later hidden in all of that smoke drives up, tries to get through the same hole, is unable to, detonates his explosives in the same place. It blows out windows in the hotel. Part of the hotel damaged. Apartments nearby damaged.

One family, according to Iraqi police, was trapped in their building when it collapsed upon them. Six people were killed -- two of them were children, one of them a woman. Forty people injured. And more than 30 cars damaged by the force of those explosions.

Very striking this attack on the al-Hamra Hotel three weeks after a very, very similar attack on another hotel, the Palestine Hotel, used by western journalists. Again, the modus operandi of the attackers to try and breach the security with one set of explosives and then drive a second car bomb right through -- Kelly.

WALLACE: Nic, thanks for the update. And we'll be watching your reports on "AMERICAN MORNING" and throughout the day on CNN. Nic Robertson reporting live from Baghdad for us.

Well, the political battle over the Iraq war has followed President Bush to the Asia-Pacific Economic Summit.

Our White House correspondent, Dana Bash, is traveling with the president, and she is joining us live from Busan, South Korea.

Dana, good to see you. Give us the latest on what is clearly becoming an intensifying war of words.

DANA BASH, CNN WHITE HOUSE CORRESPONDENT: Well, the latest, Kelly, is that the White House is trying very hard to make sure that Congressman John Murtha, the Democratic congressman who came out yesterday saying that six months and troops should be out, saying that that is the position that he holds. Quite an influential Democrat, as you know.

The White House is trying to make sure that that doesn't stick or, more importantly, does not grow, even and especially among Republicans and Independents, many of whom have a lot of respect for Congressman Murtha.

The latest we just heard just a short while ago from the president's national security advisor, Stephen Hadley, talking to us here in South Korea, saying that John Murtha is wrong. Let's listen.

(BEGIN VIDEO CLIP)

STEPHEN HADLEY, NATIONAL SECURITY ADVSIOR: He's a veteran, a veteran congressman and a great leader in the Congress. On this issue, the president believes he's wrong. And it is interesting that just two days ago the Senate of the United States in voting on the Levin amendment had an opportunity to reject the position of deadlines or immediate pullout of troops.

(END VIDEO CLIP)

BASH: Now, Stephen Hadley perhaps a more muted response compared to what we saw from the White House press secretary shortly after John Murtha made his comments, or at least as soon as the White House folks here in South Korea heard the comments.

A very strong statement coming from Scott McClellan, saying in part: "Congressman Murtha is a respected veteran and politician who has a record of supporting a strong America. So it is baffling that he is endorsing the policy positions of Michael Moore and the extreme liberal wing of the Democratic Party."

And the statement went on to say: "After seeing this statement, we remain baffled. Nowhere does he explain how retreating from Iraq makes America safer."

The White House is clearly trying to put somebody, as I mentioned, who is considered a hawk on defense issues, somebody who supported the Iraq war until this point, says that he is somebody like Michael Moore, trying to put him, as the White House says, outside the mainstream even of the Democratic Party.

Bush officials pointing out, Kelly, that not even people like John Kerry, who certainly does not support the president's policy on Iraq, does not think withdrawing troops is the right thing to do.

WALLACE: Dana, and I'm sure we have not heard the last on this issue. Dana, thanks so much. Dana Bash traveling with the president in Busan, South Korea.

Well, yesterday here on DAYBREAK, we told you about Vice President Dick Cheney as he kept up the pressure on Democrats, something Dana was alluding to, and how he was vigorously defending going to war in Iraq. Well, now a former CIA director is firing back at the vice president.

In a British television interview, Admiral Stansfield Turner says the Bush administration condones torturing detainees.

(BEGIN VIDEO CLIP)

ADM. STANSFIELD TURNER, FORMER CIA DIRECTOR: I'm embarrassed. I'm embarrassed that the United States has a vice president for torture. I think it is just reprehensible.

(END VIDEO CLIP)

WALLACE: No comment so far to that from the White House.

Another issue gripping Washington is who told "Washington Post" editor Bob Woodward the name of CIA operative Valerie Plame? A senior administration official telling CNN that neither President Bush himself nor his chief of staff, Andrew Card, nor his counselor, Dan Bartlett, did it. The Associated Press is quoting a source saying that Vice President Dick Cheney was not the source.

Woodward, for his part, is mum, because, according to his bosses at "The Washington Post," he doesn't have permission from his source to publicly reveal the identity.

Well, the Food and Drug Administration is investigating the deaths of 12 Japanese children who took the drug, Tamiflu. "AMERICAN MORNING" is chasing that story and many others.

Soledad O'Brien is joining us now with a preview.

Good morning, Soledad.

SOLEDAD O'BRIEN, CNN ANCHOR: Hey, Kelly, good morning to you.

Yes, as you may know, an advisory committee to the FDA is now looking into concerns about the drug, Tamiflu. As you mentioned, there are concerns because 12 children in Japan have died after using Tamiflu. And there have been all of the reports of delirium and hallucinations.

The drug, as you know, has been really named as the drug that could be used in the forefront of the battle against the bird flu. So, today, we're going to investigate the risks of Tamiflu.

Also, we were talking about this yesterday, the best age in which to get married. You know, we never heard from you, Kelly, when you got married, when you got hitched.

WALLACE: I was well past that age, 23 to 27, higher, higher, higher.

S. O'BRIEN: Well, as you know, between 23 and 27, that is the golden time to get hitched. We're going to talk this morning to the president of the National Fatherhood Initiative. They're the ones who actually got this study done. And find out why they did the study, what they think the results say to young people who are considering getting married.

That's all ahead this morning, Kelly. We'll see you then at the top of the hour. WALLACE: Soledad, I'm looking forward to that, and I'll take some notes to make sure my marriage lasts.

S. O'BRIEN: Now, that I can't promise you.

WALLACE: OK.

S. O'BRIEN: I'm not sure we're going to get into that.

WALLACE: OK. All right, Soledad, we'll talk to you in a few minutes. Thanks so much.

Up next here in DAYBREAK, the Senate comes up with a big chunk of tax breaks. Our Carrie Lee breaking down the vote for us.

And if you're looking to steal a day or -- excuse me. If you're looking to steal a deal the day after Thanksgiving that is, you can point, click and save money, as well as time. You won't want to miss this. Those details coming up a bit later.

But first, here's a look at what else is making news this Friday morning, November 18.

(COMMERCIAL BREAK)

WALLACE: And a look now at how the international markets are trading. Tokyo's Nikkei is up 211 points. The London FTSE is up 62 points. The German DAX is up 55 points.

In futures trading, oil is down 9 cents, to $56.45 a barrel this morning.

Well, it's time now for a little "Business Buzz."

Investors will be closely watching the Nasdaq today. That's after it posted its highest close since June of 2001 yesterday.

Web search engine Google gained 1.3 percent and finished at $403.45.

Yahoo! up 5.5 percent, to close at $42.23, and that is a five- year high.

Well, senators worked late into the night and passed a tax bill after midnight.

Carrie Lee is joining us now to look at the ins and outs of the bill and what it means for all of us.

Hello.

CARRIE LEE, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Kelly. Good morning to you. Happy Friday.

A big part of this bill is preserving tax cuts that were approved in previous years that are set to expire unless lawmakers keep them alive.

Now, the Senate passed this bill last night. The bill will reduce taxes by about $60 billion over five years. The Senate passed 64-33, and that's a pretty wide margin.

The major elements of the bill include the reduction of the alternative minimum tax. So, this is good news for a lot of folks out there. The AMT was originally designed to make the wealthy pay their fair share, but it was never indexed to inflation. So, every year, more people fall into it. It now affects millions of middle-class families today.

Well, these proposed changes will prevent about 14 million families from paying higher taxes.

Now, there is some bad news for stock investors, though. The bill does not extend the 15 percent tax rate on capital gains and dividends, which was added to the tax laws in 2003. And that lower rate is set to expire in 2008.

The bill will provide $7 billion in assistance to those hurt by Hurricane Katrina and other storms.

And also, finally, the so-called windfall tax on oil company profits was defeated. The bill does include a change to accounting methods, though, which means a $4.3 billion tax hike on oil companies.

Remember, the House still has to vote on this bill, so major changes are likely. They'll probably do that after Thanksgiving.

In particular, Republicans want to eliminate the tax hike on big oil, and there's no surprise there. In fact, that hike on oil, that issue has had a presidential veto threatened. So, that's certainly a sticking point.

WALLACE: And any sense as to how the markets will react? I know this after midnight. But any sense of how the futures are -- if they're reacting at all to this move?

LEE: It's hard to say whether it's this move. Futures are looking mixed. We don't have many profit reports. We don't have the economic news today. So, we'll see what happens. Right now it's looking mixed. But as you were saying, yesterday was a very nice day for techs especially. Hewlett-Packard is one stock to watch, better- than-expected profits reporting.

WALLACE: All right, Carrie, thanks so much for the "Business Buzz."

LEE: My pleasure. You too. Thanks.

WALLACE: Have a nice weekend. See you Monday.

Your news, money, weather and sports. It's about 45 minutes after the hour. And here is what is all new this morning. Four children are dead following a late-night apartment fire near Cincinnati, Ohio. Fire officials say two other children were hospitalized. The cause of the fire still is not known.

In money, Bill Gates has been unseated as the country's top giver. "Business Week" magazine lists Intel co-founder Gordon E. Moore as its philanthropist. Moore and his wife donated $7 billion over the past four years. Gates donated 28 billion, but Moore gave a larger percentage of his net worth.

In culture, expect to see big crowds today for the opening of the fourth Harry Potter movie. Some theaters actually began showing "Harry Potter and the Goblet of Fire" just after midnight last night. The last Potter film made about $90 million during the opening weekend.

In sports, NASCAR driver Kurt Busch says he regrets comments he made to police following a traffic stop in Phoenix last week. He told the Associated Press that he wasn't drunk during that incident, but got him suspended for the final two races of the year. Busch reportedly accused the officer of being a Jeff Gordon fan.

To Jacqui Jeras, who knows a lot about sports, in Atlanta, but she's covering the weather for us right now.

(WEATHER REPORT)

WALLACE: Well, still to come here on DAYBREAK, talk about an early bird special. Smart shoppers can be a week ahead of the curve in their search for the best post-turkey day deals. We'll tell you how. You have to stay tuned for that.

But first, a look at who is celebrating birthdays on this Friday, November 18.

(COMMERCIAL BREAK)

WALLACE: And welcome back. It's about 51 minutes after the hour, and here is what will be making news today.

South Korea, known as a major supporter of President Bush's Iraq policy, is announcing plans to pull a third of its troops out of Iraq in 2006; this, according to a National Security Council spokesman, who says no final decision has been made.

Radio City musicians will be back at work this afternoon. The musicians are ending their two-week strike after agreeing to a tentative deal with the Music Hall. The annual Rockettes Christmas Spectacular has been going on with recorded music.

Actor Russell Crowe may never be allowed to make a movie in America again. He'll be in court today to answer assault charges from when he reportedly threw a phone at a New York hotel concierge back in June. If he is found guilty, Crowe could get seven years in prison, and the U.S. government could bar him from working in the United States. Well, professional and amateur shoppers are getting their best consumer game faces on in preparation for the retail epic event of the year happening a week from today. You know what we're talking about. It is called Black Friday or, traditionally, the day after Thanksgiving sales.

Well, now there is a better way to get a jump on all of the bargains. Maybe you'll just have to log on to find out.

"USA Today's" Ginger Gadsden is here to tell us all about it.

So, Ginger, give us a sense. Before we madly rush out to the stores, what can we do to prepare?

GINGER GADSDEN, "USA TODAY": Oh, my goodness. Hey, good morning, Kelly.

You know, it is like having a game plan. But this year, retailers are seeing red over Black Friday.

As you mentioned, Black Friday is the day after Thanksgiving and traditionally is when we start the holiday shopping frenzy. It's the day when consumers aim to get the best deals on holiday gifts. So they often form lines outside stores long before the doors open.

But now, some retailers are angry that somehow their sales are being leaked over the Internet, Kelly. In the past, we would simply wait for that big, fat Thanksgiving Day newspaper to arrive, and that's when we would map out our strategy. It's generally loaded with all of those sales ads from retailers, who say they have the lowest prices on the hottest holiday items.

And for many shoppers, it's when they would map out their strategy, and then it's all bets are off after that, Kelly.

WALLACE: We're going to also put up on the screen some of these Web sites that we're talking about, where we're finding out about these deals.

But here is a question: Is there a note of caution for consumers? Could some of these be rumors? Or could they be the real deal, the actual bargains that you'll see on the Friday after Thanksgiving?

GADSDEN: It's a little of both, Kelly, actually. Retail experts say that retailers tell them, you should not believe an ad until it's released by that retail outlet or that retail chain. But in the past, we've seen that some of those ads have come true.

The Web sites you're putting up right now, folks would log on to that, and they would see that someone has something cheaper. And sure enough, when they would arrive, that person would get the best sale price, because they got online before anyone else.

And retailers are also concerned. They don't quite know how this information is leaking out to the public, Kelly, although they have some ideas, for example, of elves don't come and put the sales prices up, as you know, on Thanksgiving. So, those prices are up the next day.

They think that some of their employees may actually be telling family and friends to give them a heads-up on the great sales prices. And so, two people tell another two people, and then that's how the word gets out, and it ends up online.

WALLACE: In the age of the Internet, right? Two people tell two people, it goes on a Web site, and then many thousands of people can find out.

GADSDEN: That's right. You tell a couple of friends. It's the great equalizer, is what they're calling the Internet as far as shopping.

WALLACE: It sure is. OK, Ginger, we have to leave it there. Thanks so much. Ginger Gadsden with "USA Today" giving us the latest to prepare for Black Friday.

Well, when we come back a look at your travel forecast for this Friday. We'll be right back.

(COMMERCIAL BREAK)

WALLACE: And welcome back, everyone. Jacqui now an update for all of the business travelers out there.

(WEATHER REPORT)

JACQUI JERAS, CNN METEOROLOGIST: It's that time of the day for the mug quiz. We did not have a question yesterday. So we don't have a winner today. But you can be a winner on Monday morning if you can answer these questions.

The CDC has set up quarantine stations at how many U.S. airports? And how many children are in foster care in the U.S.?

Submit your answers online. The address, CNN.com/daybreak. You could be a big winner Monday morning. Start out the week great -- Kelly.

WALLACE: Exactly right. Jacqui, a great way to start the week. Jacqui, you have a wonderful weekend, OK?

JERAS: Thanks. You too.

WALLACE: We'll see you on Monday.

From the Time Warner center, everyone, in New York, I'm Kelly Wallace, in today for Carol Costello. Thanks so much for starting your day with us. "AMERICAN MORNING" starts right now.

S. O'BRIEN: Thanks, Kelly.

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