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American Morning

Russia and Georgia Agree to a Cease-Fire; Michael Phelps Now the Winningest Olympian in History, Wins Another Gold; Airlines Charging Soldiers for Extra Bags; Senator Mel Martinez's American Dream; ; Militant Shooting South of Kabul, Afghanistan; The Economic Downturn Taking a Slice Out of Cosmetic Surgery; Praying for Rain on Obama's Parade

Aired August 13, 2008 - 06:00   ET

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


JOHN ROBERTS, CNN ANCHOR: Breaking news. Reports that Russian tanks run over a cease-fire and roll into a key city.
The pump police.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: This pump has no longer got the state seal of approval of being accurate.

(END VIDEO CLIP)

ROBERTS: Looking for scams that give you less gas.

And, gold record.

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UNIDENTIFIED MALE: Clearly today I think he's the best swimmer we've seen.

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ROBERTS: U.S. swimmer Michael Phelps enters unchartered waters on this AMERICAN MORNING.

Is Phelps just incredible or not? Did you see the team relay swim last night?

KIRAN CHETRY, CNN ANCHOR: It was so exciting. You have world records being shattered everywhere. Now some people are scratching their heads and saying, wait a minute, something's going on.

ROBERTS: I mean, the American team was way out here and the world record was way back here. Just incredible what happened.

CHETRY: Right. Is it the suit?

ROBERTS: Everybody is wearing the same suit, though, but they're still so far out in front. Just an amazing performance last night.

CHETRY: Yes. And we'll bring you all the highlights a little bit later. But first, we begin with the fragile cease-fire between Russia and neighboring Georgia.

There are reports of Russian tanks entering the Georgian city of Gori overnight. The head of Georgia's national security council says some 50 Russian tanks entered the city just hours after Georgia signed on to end the cease-fire to end Russia's military operation.

Meantime, Russian military officials claim there's been no active withdrawal of Georgian troops from the separatist region of South Ossetia. The French-brokered truce calls for both sides to withdraw the positions held before the fighting again. The deal lets thousands of displaced civilians return home safely and opens Georgia to humanitarian aid.

A deadly rush hour bombing in Lebanon this morning. Eighteen people killed, 40 hurt when a bomb ripped through a bus carrying civilians and members of the military. Security officials say the bomb was planted on the side of a main street in Tripoli and went off as the bus went by. Al-Qaeda-inspired militants are believed to be behind that attack.

And U.S. swimmer Michael Phelps now the winningest Olympian in history, taking two more gold medals in Beijing. Number 10 came in the world record time in the signature event of Michael Phelps. That's the 200 meter butterfly. Number 11 then came less than an hour later. That was the 800 meter relay John was talking about.

Phelps and his teammates shattered the record by more than four seconds. Just amazing. Phelps is five for five with three more events to go, and he can break Mark Spitz's record for most golds in a single Olympics -- John.

ROBERTS: Unbelievable performance.

Back now to our top story this morning. Secretary of State Condoleezza Rice will brief reporters on steps the international community may take to punish Russia for its invasion of Georgia. And then there are questions about whether the seemingly fragile cease- fire will hold. Russia's foreign minister says the future of Georgia's separatist regions must be reviewed even if it's not spelled out in the truce.

Meantime, Georgian officials claim Russia has already violated the cease-fire by sending tanks into the Georgian city of Gori. CNN's Frederik Pleitgen is live in the Georgian capital, Tbilisi, for us this morning.

Fred, what do we know about these tanks that have gone into Gori? They may be Russian armaments but are they being manned by Russians?

FREDERIK PLEITGEN, CNN CORRESPONDENT: Well, that's the big question everybody here is asking right now. Certainly you're absolutely right. The Georgian president today saying that up to 50 tanks entered the town of Gori. Saakashvili said this at a press conference earlier today. Let's listen to the sound from that presser.

(BEGIN VIDEO CLIP) PRES. MIKHEIL SAAKASHVILI, GEORGIA: As you know, we tried to negotiate together with President Sarkozy. Cease-fire on Georgian side was always enforced. But then you saw the Russian side. Russian occupational force didn't respect any cease-fire. They came into and they -- as I said, they went through our towns and they were rampaging and they're also shooting.

(END VIDEO CLIP)

PLEITGEN: Now, John, the Georgian president, of course, talking about those alleged tanks entering the city of Gori. The Russians for their part have already reacted to these accusations. They say it is absolutely not true that any of their tanks have entered the city of Gori.

We are trying to assess the situation right now and, of course, we will keep you posted once we get more on that situation there. Certainly what we're hearing from the Georgian authorities is they're saying that last night was fairly calm here on their territory. They say they know of no aerial bombardments going on. But as you can see, the cease-fire here is still believed to be very, very fragile -- John.

ROBERTS: Well, Fred, if they're not Russian tanks or at the very least Russian crews, what might they be?

PLEITGEN: Well, that's a very good question. I mean, one thing that some people believe is that these tanks may be Russian tanks but that they may be manned by South Ossetia rebels. Now that is basically just an accusation that is out there. It's a rumor that is out there.

But there is no doubt that the rebels both in South Ossetia and also in the other breakaway province of Abkhazia have Russian military gear. They have Russian tanks. They have Russian artillery, and they also have Russian planes.

So this is something that certainly could be the case, though it has by no means been proven, John.

ROBERTS: Frederik Pleitgen for us this morning with the latest from Tbilisi, capital city of Georgia. Fred, thanks very much. We'll check back with you a little bit later on.

Georgia has been seriously outmatched in this conflict. Here's a look at the two militaries in an "AM EXTRA" for you.

According to the "Associated Press," Russia has a little more than a million troops, Georgia just 37,000. Russia has 6,000 tanks and some 1,700 aircraft. Georgia just 230 tanks and 12 aircraft. Russia will spend some $40 billion on military matters this year, Georgia just about $1 billion.

CHETRY: Also new this morning, the Department of Homeland Security is creating its own counterintelligence division. This is in response to concerns about foreign spies and terrorists. In an internal memo obtained by the "Associated Press," Secretary Michael Chertoff says the agency is "vulnerable to adversary seeking information about U.S. defense programs both classified and unclassified." Employees traveling overseas are being told to report any contacts and suspected espionage behavior.

A new report released by the Congressional Budget Office says that military contractors have cost taxpayers $85 billion since the war in Iraq began. And if that spending continues that number could hit $100 billion by the end of the year. Democrat Kent Conrad, chairman of the Senate Budget Committee, says using contractors restricts accountability and opens the door to corruption.

The report comes after some contractors were investigated in connection with the shooting deaths of Iraqis, and U.S. troops were accidentally electrocuted because of shoddy electric work. There are at least 190,000 contractors in Iraq and neighboring countries.

And nearly one in three Americans who bought a home in the last five years now owe more on their mortgages than their homes are worth. That's from zillow.com. It's a Web site tracking home values. House prices fell nearly 10 percent in the second quarter, the largest decline in a dozen years and nearly one in four homes sold last year were sold at a loss.

Right now, we bring in Ali Velshi. He is here talking a little bit also about taxes. And who's paying taxes and who isn't?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, I'll tell you, there's an interesting story. It came out from the GAO, the Government Accounting Office, about companies that don't pay taxes in the United States. And it says that 1.3 million U.S. companies and 39,000 non-U.S. companies paid no federal income tax between 1998 and 2005.

Now these companies had combined revenues of $2.5 trillion. Now, that's a big number. When you look at it as a percentage of U.S. businesses, that's 66 percent of all U.S. companies and 68 percent of foreign companies doing business in the United States. However -- however, before everybody gets entirely outraged by this whole thing --

CHETRY: We were outraged.

VELSHI: Yes. There's a little more to this. First of all, a number of these firms are small businesses and many small businesses are owner operated. The owners pay income tax and then they don't pay it as corporate tax. Otherwise that would be double taxation. So you eliminate some of those.

There are also other reasons why companies legitimately don't pay tax and that is if they've reinvested. Because when they reinvest a lot of that money that's sometimes...

CHETRY: Tax free.

VELSHI: ... tax free because it creates jobs or opens plants and creates productivity. So this is one of those reports that it's worth really digging into and getting well past the headlines on. The headlines do seem a little outrageous. There may be some reasons why companies aren't paying taxes. There's probably got more to do with how we tax corporations because they're built to be taxed in different ways.

CHETRY: Right. They can also report losses and have that offset what they owe tax.

VELSHI: Right.

CHETRY: It seems like though there are ways they can get around paying taxes and the average Joe can't.

VELSHI: Well, that's very true. The average Joe is very, very limited on what you can do with your taxes. You pretty much have to pay them.

Corporations do have more flexibility, and some people say a little bit too much flexibility. That's going to become one of the issues this election that we're talking about.

John McCain says the best way to stimulate this economy is tax businesses less. Barack Obama thinks we need to tax them more. There are implications to both of those which we'll be talking about in the next few weeks.

CHETRY: And maybe neither of them have a platform if they're not paying taxes in the first place.

VELSHI: Right. Exactly.

CHETRY: Thanks, Ali. We'll see you a little bit later.

ROBERTS: Eight minutes now after the hour. Olympic record breaker and Michael Phelps still just a little more than halfway done. What's ahead for the American swimmer? We're live in Beijing with an Olympic recap.

CHETRY: Paying to go fight.

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JOE DAVIS, VETERANS OF FOREIGN WARS: These young troops are going to war. There's a lot more on their mind.

(END VIDEO CLIP)

CHETRY: How airlines are sticking it to soldiers on their way to war. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

ROBERTS: Welcome back to the "Most News in the Morning." Michael Phelps is the gold standard. The American swimmer picked up his 10th and 11th career gold medals last night. He is now the winningest athlete in Olympic history. Here's a look at the medal count as it stands at this hour. The U.S. leads with 28 medals overall, ten of them gold. China's got 25 but leads in gold with 17. Korea in third place with 12 medals overall.

Michael Phelps far from over. He's got his sights set on another record. Our Larry Smith is live in Beijing with all of the Olympic developments.

You look last night at that 800 meter relay, Larry, that was just an unbelievable performance Team USA put in.

LARRY SMITH, CNN SPORTS CORRESPONDENT: Yes, it really was. In fact, Michael Phelps, what a big role he played in getting them out to a 2.5 second lead. When he left the pool, it was just cruise control from that point on.

But you know, first, his first race of the day, not even a wardrobe malfunction could keep him from a world record and a gold medal. It was the 200 meter butterfly, and three quarters of the way through at the 150 meter mark, his goggles had filled with water. He couldn't even see where the wall was. And yet he still gets a victory and a gold medal, and a world record and that his fourth. That put him over the top tenth gold medal in his career, and as you mentioned, the all- time winningest, most decorated athlete in Olympic history.

After that it was the relay. The U.S. was so dominant in this. They're the first relay team to submit a time under seven minutes in the tube, the 4x200 meter freestyle relay, five seconds better than the silver medalist team from Russia. In fact, one of the guys later talked about what it's like to swim with the Phelps gold medal at stake.

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RICKY BERENS, OLYMPIC RELAY GOLD MEDALIST: Don't screw up. That's the only thing you can think of is, I mean, having the fastest guy behind you leading off. You know, he's on your team. It's hard to screw up with him behind you.

(END VIDEO CLIP)

SMITH: Well, that's true. Michael Phelps, by the way, gets a bit of a reprieve on Thursday here. That's tomorrow here in Beijing. Only one race for him. That is a preliminary heat. He will be back in the pool looking for gold Friday morning again here in Beijing.

Now, the women's gymnastics team had a shot at gold but, boy, they really let it slip through their fingers. Only a silver medal for them. Alicia Sacramone, the veteran of the team, slipping during a crucial moment that caused the U.S. points. They come up second instead to the Chinese team. So China sweeps both the men's and women's team in that.

By the way, Shawn Johnson and Nastia Liukin, both performing well in that. But, again, U.S. just taking only the silver in that event. Let's go back to you. ROBERTS: Hey, Larry, a lot of the swim teams are using these super fast suits, are they not?

SMITH: Yes. Just about all of them are and that's why so many world records and Olympic records are falling because it keeps the skin. Skin moves, and so it keeps the skin tight and therefore, it allows better times.

ROBERTS: So for the U.S. team to be that far out in front when everybody's using the same technology, that's pretty amazing.

Larry Smith for us outside the Bird's Nest and Water Cube. Larry, thanks so much.

CHETRY: Well, if you're thinking about getting a facelift, maybe some lipo, think again. Plastic surgery feeling the pinch of a slowing economy. We're going to take a look at how the industry is being affected.

Plus, Rob Marciano watching extreme weather for us this morning. Hey, Rob.

ROB MARCIANO, AMS METEOROLOGIST: Hey, Kiran. A couple of things in the tropics. Some waves that continue to march towards the U.S. The hurricane hunter aircraft went into this one. We'll tell you what it found when AMERICAN MORNING comes right back.

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ROBERTS: Look outside our studios this morning at a fountain there in Columbus Circle. And it's a beautiful day here in New York City. You're waking up to 65 degrees and sunny. It's going to go up to a high of 82 with lots of sunshine today. Should be a lot dryer than it was last week as well. And if you've got the chance, get out there, have lunch in the park.

CHETRY: It is gorgeous weather. It makes you wish it was like this all year round. But alas.

ROBERTS: I could deal with this.

CHETRY: Yes.

ROBERTS: It's kind of like San Diego weather, you know.

CHETRY: I just said that yesterday to my friend as well.

ROBERTS: Just beautiful.

CHETRY: This is what it would be like if we live in San Diego, but we don't.

17 minutes past the hour. Rob Marciano down there in Atlanta. How are you guys doing?

MARCIANO: Doing good. You know, palm trees in San Diego, too. CHETRY: It's beautiful.

MARCIANO: It's a very nice environment. That morning cool air. But you know, there are some things to deal without there.

You've got wildfires, you've got earthquakes. So it's all not a bed of roses. There's always a price to pay for paradise, including in places like the Caribbean which at this time of year they've got to deal with hurricanes.

There are a couple of tropical waves out here in the Atlantic. We told you about this yesterday. This one of immediate concern because it's the closest and because it got close enough to the islands here, the National Hurricane Center fired off a recon mission. A C-130 went in there, checked it out, buzzed around, dropped some gauges and took some measurements. It didn't find a close circulation. It didn't find a whole lot of strong winds. And even though last night you can see here the convection kind of fizzled apart just a little bit.

So it didn't look that impressive this morning but they're not only firing off one but two aircrafts. One is a NOAA P-3. It's got a whole bunch of different stuff including a couple of Doppler radars and another C-130. Now both go off at around 11:00 today.

And one of the reasons probably is that our computer models are really firing this thing up to get into a pretty strong hurricane. So they want to figure out exactly why they're picking up on that.

Heavy rain across the south today. A little bit farther south than where we need it. North of Atlanta is where it should be needed. Across the Carolinas desperately need a rainfall here. This isn't that significant. Might see an inch or two but every little bit helps in the drought-stricken areas.

John and Kiran, back up to you.

ROBERTS: All right. Rob, thanks very much. We'll check back in with you really soon.

Escape from Cuba. A senator's harrowing journey to freedom. We'll talk with one Florida Republican about his new book and why he's supporting John McCain.

CHETRY: Paying to go fight.

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JOE DAVIS, VETERANS OF FOREIGN WARS: These young troops are going to war. There's a lot more on their mind.

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CHETRY: How airlines are sticking it to soldiers on their way to war. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK) ROBERTS: 21 minutes after the hour. Welcome back to the "Most News in the Morning." Going to war is tough enough but getting hit with an excess baggage fee before you even report for duty? That seems downright unfair.

As our Deb Feyerick reports, some soldiers about to go overseas are finding themselves victims of airlines' new policy of charging for check bags. She's here now with that story.

DEBORAH FEYERICK, CNN CORRESPONDENT: John, Kiran, this is a policy that some airlines have had in place for several years. With rising fuel costs and airlines cutting back, there's greater urgency that troops may initially have to shell out money adding to their worries.

(BEGIN VIDEOTAPE)

FEYERICK (voice-over): Are U.S. soldiers setting off for war paying extra just to take their kit with them? One staff sergeant leaving San Antonio for Camp Bowie in Fort Worth was charged 100 bucks for checking a third bag. And the Veterans of Foreign Wars organization is worried the practice will spread. Now airlines are feeling the pinch.

JOE DAVIS, VETERANS OF FOREIGN WARS: What we want to do is to nip this in the bud by exempting the military personnel who are traveling under orders from having to pay a fee on their third bag.

FEYERICK: Joe Davis says soldiers don't have the time or money to be worrying about claiming baggage expenses.

DAVIS: You have a family at home and you stand at that airline counter and you have three bags in your hand. And they say you can't get on board unless you pay $100 up front right now. What are you going to do?

These young troops are going to war. There's a lot more on their mind than have to worry or try to remember to get a $100 reimbursement to them when they get into a war zone.

FEYERICK: Veterans of Foreign Wars sent a letter to the aviation industry asking that U.S. troops be exempt from any extra baggage fees. American Airlines and others reached by CNN defend the practice saying troops are allowed heavier and bigger bags and can check two for free, unlike commercial travelers. An American Airlines spokesman tells CNN troops are allowed 190 pounds each free of charge. And that, quote, "If they pay, they get reimbursed, so at the end they don't pay a dime."

Vouchers authorizing extra baggage are usually issued by the military prior to a flight. The reimbursement is likely pending approval. As with any business expense, it is not guaranteed.

The group representing airlines says it supports the troops but that baggage policy is, quote, "made independently by the individual airlines." It has no plans to ask for an across the board waiver for U.S. service members. (END VIDEOTAPE)

FEYERICK: Many airlines waive some or all excessive baggage fees for military members traveling on official order. But for those who don't the Department of Defense says the fees are reimbursable if authorized on a travel order, really like any business traveler -- John, Kiran.

CHETRY: Deb Feyerick for us. Thanks.

Well, both Russia and Georgia have agreed to a cease fire but there are new reports of Russian military activity still happening inside Georgia. So the question this morning, is the crisis really over?

ROBERTS: Sagging sales.

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UNIDENTIFIED FEMALE: People were using their home equity to help refinance and use it for plastic surgery.

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ROBERTS: How the mortgage meltdown is cutting into the cosmetic surgery business. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Welcome back to the "Most News in the Morning." Senator Mel Martinez was born in Cuba but has been living the American dream. When he was 15 years old he fled Castro's Cuba, ducking from machine gunfire and enduring vicious life-threatening taunts from Castro's militiamen. Mel came to the United States back in 1962. He learned to speak English, went to school, ended up building a career and had a family.

Then in 2004, Martinez became the first Cuban-American elected to the U.S. Senate. The senator writes about the remarkable journey in his new memoir titled "A Sense of Belonging" and Senator Martinez joins me now. Great to have you with us this morning.

SEN. MEL MARTINEZ (R), FLORIDA: Kiran, good to be with you.

CHETRY: Congratulations on the book. It really tells a very interesting story about how you came over from Cuba. You also write about how when you came here you didn't speak any English. You ended up at this intake camp. You were separated from your family because your parents were still there. They thought that Castro's regime was going to quickly fall.

MARTINEZ: Right.

CHETRY: And you write, "The psychological adjustment was taxing. The sense of isolation so powerful that I clung to any link to home I could find, no matter how tenuous." How did you adjust?

MARTINEZ: Well, it was tough at first, particularly at that age. But as time went on, really my adjustment came into being when I was placed in a foster home in Orlando, Florida. And a wonderful family, the Youngs, took me into their home.

And it began my adjustment -- my becoming an American really because I had to learn the language, obviously. I had to learn to do things like eat peanut butter which I'd never seen before, and just become part of the American lifestyle. Went on to high school and participating in sports was the big breakthrough for me in terms of making me be one of the boys.

CHETRY: It's interesting because you have not been back to Cuba since.

MARTINEZ: No, I haven't.

CHETRY: You probably could go if you wanted to with the Senate delegation. And today actually is Castro's 82nd birthday. His brother Raul is now in charge. Do you think things have changed?

MARTINEZ: They really haven't, unfortunately. I was so hopeful there might be winds of change and see -- see the power to his brother. The fact is his shadow still remains large, and I wish I could wish him a happy birthday but unfortunately, I would wish that he would really recede from the scene completely. The fact of the matter is that in Cuba today, the freedoms are denied, human rights are violated just as they were before. And there really is no progress or seeing a change that would be better for the Cuban people.

CHETRY: You know, in your state, Cuban-Americans historically largely Republican and really what they're known for in terms of politics. There's a recent Pew Hispanic Center poll that shows Obama actually beating McCain 53 percent to 29 percent among the Cuban-American population. What do you attribute that to? And what does the Republican Party need to do to get that traditionally loyal voting bloc back?

MARTINEZ: I would attribute it to a really bad poll. Wait until --

CHETRY: You don't buy the poll?

MARTINEZ: No, I don't. Absolutely not. No, I think the Cuban- American community is very solidly behind John McCain. Now, that's not just political talk. I would find it hard to believe.

Maybe among all Hispanics in Florida Obama could be leading because in Florida Cubans are no longer the predominant Hispanic group. They are in south Florida but not throughout the state. A large number of Puerto Ricans, most of whom are Democrats. So I would say among all Hispanics in Florida, Obama probably leads but McCain has got a very, very strong support -- a very strong base of support.

CHETRY: In fact, as they're talking about registering new Latino voters, I believe 18 percent are going Democratic registration, only two percent for Hispanic Republicans in your state.

MARTINEZ: Right. CHETRY: It's also interesting though, because there are those choosing neither party is also up by 14 percent. One of the big issues in your state, offshore drilling. Now, you had concerns about it. Where do you stand?

Nancy Pelosi, the House speaker, actually on Larry King said, you know what? Maybe I would allow it if it was part of a larger bill.

MARTINEZ: Right.

CHETRY: How do you feel about offshore drilling since your state's very directly involved?

MARTINEZ: I believe we need to drill more, and we need to do it domestically because we cannot just depend on alternative fuels and new different types of technology. The fact is that we have to bridge ourselves and oil is the only way of doing it, because each and every year we're more dependent on foreign oil because we produce less and less.

We need to do it in a way that's safe. And Florida, obviously, has a big tourism economy, and we're very proud of our environment. And so, it needs to be well off of Florida coast. But as long as we have some safeguards along those lines, more drilling needs to take place on shore. And I hope that Speaker Pelosi is true to her word and not just a political conversation but in fact a real vote that can open more drilling within American -- American shores.

CHETRY: Senator Mel Martinez, great to have you. The book is called "A Sense of Belonging." Thanks for being with us this morning.

MARTINEZ: Thank you, Kiran.

JOHN ROBERTS, CNN ANCHOR: Half past the hour now. And here are some of the top stories that we're following this morning. Russia's defense ministry is denying reports that they have violated the newly brokered ceasefire with Georgia. Officials in Georgia claim some 50 Russian tanks moved into the City of Gori even after they agreed to a peace deal.

The U.S. has scrapped plans for a joint NATO military exercise with Russia that was scheduled to begin just two days from now. This morning Secretary of State Condoleezza Rice will brief reporters on steps the international community may take to punish Russia for the invasion.

A militant shooting just south of Kabul, Afghanistan. Officials say three women were killed including an American. All were part of a U.S. aide organization called the International Rescue Committee. The group is based out of New York City. No one has claimed responsibility for that attack.

A new military study says reserve troops serving in Afghanistan and Iraq are more likely to develop drinking problems than active duty soldiers. Researchers are blaming an increase of stress due to the lack of preparation and less access to support services back at home. It's the first study to compare the alcohol problems of Iraq and Afghanistan veterans before and after deployment.

Back to our top story now. The conflict in Georgia has caused a real chill in relations between the United States and Russia. Russia has received U.S. support for Georgia as a threat.

CNN's Zain Verjee has a closer look at what's driving the Russians in this conflict.

(BEGIN VIDEOTAPE)

ZAIN VERJEE, CNN STATE DEPARTMENT CORRESPONDENT: Russia's letting the world know it's in charge of its immediate neighborhood. Pounding U.S. ally Georgia. But Russia's foreign minister accused Secretary of State Condoleezza Rice for misleading President Bush by claiming Russia wanted to overthrow the Georgian president.

SERGEV LAVROV, RUSSIAN FOREIGN MINISTRY (through translator): This is totally irresponsible to mislead the leadership of a powerful country about the true intentions of Russia. We have no plans to throw down any leadership.

VERJEE: From Russia's point of view, the U.S. support for Georgia is a direct threat to its influence. Washington, which holds Georgia up as a symbol for democracy, is pushing for it to join the NATO club. Russia's sending a signal to its former soviet republics, like Ukraine or Moldova.

SARAH MENDELSON, DIRECTOR, HUMAN RIGHTS AND SECURITY INITIATIVE, CSIS: If I were a neighbor of Russia and I saw what Russia had done to Georgia, I would be very nervous. I think those countries that are leaning towards the west are very nervous today.

VERJEE: Another poke in Russia's eye, America's missile defense plans in Poland and the Czech Republic. That's making Russia feel encircled. A long-standing sole point for Vladimir Putin, the U.S. backing for Kosovo's independence.

MENDELSON: I think this is in part payback for Kosovo. The international community recognized the independence of Kosovo, and Russia wanted similar status for South Ossetia and Abkhazia.

VERJEE: The Russians think those two pro-Russian regions should be able to break away from Georgia.

(on camera): The U.S. and its allies are debating ways to isolate and punish Russia for its actions. Senior administration officials say Russia's future relations with NATO and its role in the G-8 and other international organizations could be at risk. One senior U.S. official saying President Medvedev's entire agenda for Russia's future is at stake.

Zain Verjee, CNN, Washington.

(END VIDEOTAPE)

CHETRY: Zain, thanks. Alina Cho joins us now with some other stories new this morning.

Good to see you.

ALINA CHO, CNN CORRESPONDENT: Top of the morning to both of you.

ROBERTS: Good morning.

CHO: Good morning. And good morning, everybody. A follow up to a story we first brought you right here on AMERICAN MORNING back in June. The principal of a Massachusetts high school who was quoted as saying 17 teenage girls in his school formed a pregnancy pact has resigned. James Sullivan claims Gloucester's mayor publicly slandered his reputation and his integrity. He says he doesn't recall using the word pact but he does believe many of the pregnancies were intentional. City officials say they found no evidence of any agreement to have babies.

A new study shows children with poor hand-eye coordination are more likely to become obese when they grow up. Researchers in Sweden and Britain followed the development of more than 11,000 children. Now, the connection between clumsiness and excessive weight is not really clear. But researchers say it may be linked to factors like smoking during pregnancy or a lack of exercise.

And some pretty unbelievable video to show you. A guy in Xenia, Ohio celebrated his birthday in the most unusual way, by taking a bath in the utility sink at Burger King where he worked.

CHETRY: Yummy.

CHO: That's past tense. The nearly four-minute video was shot by another worker and posted on MySpace. Burger King says the guy who took the bath and the person who filmed it were fired. And a third manager quit. By the way, he calls himself Mr. Unstable. Want fries with that? The sink, by the way, has been sterilized.

CHETRY: Oh, great. Good.

CHO: Anyway, safe to go there.

CHETRY: Yes. Exactly. At least they don't do anything with the onion rings.

CHO: Well, we hope about it. Well, plastic surgery usually reserved for the very rich. But even that industry isn't safe from the economic slide. How the downturn is keeping one woman away from the knife.

ROBERTS: Raining on Obama's parade.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Not just rain, abundant rain. Torrential rain.

(END VIDEO CLIP)

ROBERTS: Jeanne Moos with a most unusual prayer request.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Not "flood people out of their houses" rain. Just good old "swamp the intersections" rain.

(END VIDEO CLIP)

ROBERTS: You're watching the "Most News in the Morning."

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ROBERTS: 38-1/2 minutes after the hour. Welcome back to the "Most News in the Morning." With people cutting corners, there's a little less nip tuck going on these days. Yes, the economic downturn is taking a slice out of cosmetic surgery. Our entertainment correspondent Kareen Wynter takes us under the knife.

KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT: John and Kiran, good morning. It's often thought of as a perk for the wealthy. But the plastic surgery field is feeling the nip and tuck of the economy.

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WYNTER (voice-over): We often think of plastic surgery as something for only the very rich. Something that's recession proof. But plastic surgery reality TV shows have helped popularize procedures like liposuction and tummy tucks with people you won't find splashed over the fashion magazines.

UNIDENTIFIED FEMALE: Pamela.

WYNTER: Like 53-year-old Pamela Rae Chavez who had lost 70 pounds and considered going in to debt to remove saggy skin.

PAMELA RAE CHAVEZ, PATIENT: My whole idea was to get -- pull some equity out of my home, and I had it all planned. But now, I was so afraid to spend any money right now.

DR. LINDA LI, PLASTIC AND RECONSTRUCTIVE SURGEON: people are scared. They're watching their pennies.

WYNTER: Dr. Linda Li, a renowned Beverly Hills plastic surgeon and reality TV star says the mortgage crisis is causing people who weren't afraid to pay through the nose for good looks to take a second look.

LI: People were using their home equity to help refinance and use it for plastic surgery. Now that the housing industry has taken a downturn, they can't pull equity out of their homes.

WYNTER: The American Society for Aesthetic Plastic Surgery says business among its members is down by more than 50 percent. And it's not just the price tag that's giving people pause.

DR. ALAN GOLD, PRESIDENT, THE AMERICAN SOCIETY FOR AESTHETIC PLASTIC SURGERY: They don't find themselves able to take that kind of recovery period that they would have been able to take before from work, fearful that the job may not be there when they come back.

WYNTER: Pamela Rae Chavez has put her procedure on hold, waiting for the economy to rebound. But in a town where beauty is often skin deep, even a few months can feel like an eternity.

UNIDENTIFIED FEMALE: I just have to wait and see. Hopefully, things look up.

(END VIDEOTAPE)

WYNTER: One thing Pamela Rae Chavez kept repeating in our interview is the fact that this surgery is something she could have easily financed a year ago, adding it's amazing what a shift in the economy can do.

John?

Kiran?

ROBERTS: Kareen Wynter for us this morning. And here's more in an "AM Extra." According to the American Society of Plastic Surgeons in 2007, there were 11.8 million cosmetic procedures, costing patients an estimated $12.4 billion. What was the most popular cosmetic procedure? Breast augmentation followed by liposuction and nose reshaping. 2007, 91 percent of all cosmetic surgery patients were women, 76 percent of patients were white.

Kiran?

CHETRY: The NRA, National Rifle Association, accused of planting a spy within the anti-gun lobby. It's a story you'll see only on CNN.

Plus, Rob Marciano tracking extreme weather for us.

You got your eye on the Atlantic today.

ROB MARCIANO, AMS METEOROLOGIST: Yes. I got a couple of things that we're looking at there. Also, in hurricane country. They're getting some rain, some of it heavy. But is it getting to the areas that desperately need it and are suffering drought? We'll talk about the weather. It's coming up when the "Most News in the Morning" comes right back.

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ROBERTS: 44 minutes after the hour now. And time to fast forward to what will be making news later on today. Secretary of State Condoleezza Rice is going to hold a press briefing about the situation between Georgia and Russia. That will be at 10:30 Eastern this morning from the State Department. Washington and Europe are considering ways to punish Russia after its invasion.

Talk this morning about how to achieve energy independence. That comes in a few hours from former Director of the U.S. Energy Information Administration, Jay Hakes. He's going to talk about how cutting foreign oil will improve national security as well as the economy.

And today is former President Fidel Castro's 82nd birthday. Venezuela's Hugo Chavez sent Castro a present -- a portrait of Simon Bolivar, the 19th century leader who won independence for several Spanish colonies. Back in February, Castro handed power over to his brother Raul after more than a year and a half of medical problems.

Kiran?

CHETRY: Well, it's 45 minutes past 6:00 here in New York. Rob Marciano tracking weather for us in Atlanta.

Hey, Rob.

(WEATHER REPORT)

ROBERTS: I tell you, 82 degrees and sunny in New York City? Doesn't get any better than that. Thanks, Rob.

CHETRY: Thanks, Rob.

MARCIANO: See you.

ROBERTS: Georgia says Russia is violating the new ceasefire agreement. We're going to update you on the latest headlines in that conflict and take a closer look at what the U.S. role should be.

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UNIDENTIFIED MALE: Raining on Obama's parade. Not just rain. Abundant rain. Torrential rain.

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ROBERTS: Jeanne Moos with a most unusual prayer request.

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UNIDENTIFIED MALE: Not "flood people out of their houses" rain. Just good old "swamp the intersections" rain.

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ROBERTS: You're watching the most "Most News in the Morning."

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CHETRY: A little blast from the past there. Milli Vanilli this morning. Welcome back to the "Most News in the Morning." Republicans are hoping to rain on Barack Obama's parade come November.

ROBERTS: But one conservative group is getting a flood of criticism for its apparent tongue-in-cheek request that people pray for rain on Obama's open air convention speech in Denver. Here's Jeanne Moos with that.

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JEANNE MOOS, CNN CORRESPONDENT: Rain, rain, go away. Come again a certain day?

UNIDENTIFIED MALE: Would it be wrong to pray for rain?

MOOS: No. Probably not.

UNIDENTIFIED MALE: Not just rain. Abundant rain. Torrential rain.

MOOS: Well, when would this rain arrive?

UNIDENTIFIED MALE: When a certain presumptive nominee is set to give a certain acceptance speech.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: Thank you so much. Thank you.

MOOS: Hey, that's not nice -- asking folks to pray for rain on August 28th when Barack Obama is addressing 75,000 supporters in an open-air stadium.

UNIDENTIFIED MALE: I'm talking "umbrella ain't going to help you" rain.

MOOS: The digital media director for the political arm of the evangelical group, Focus on the Family, got showered, all right, with criticism.

"Focus on your own damn family, moron." "Wow. What a colossal waste of God's time." "Good thing prayer doesn't actually work."

UNIDENTIFIED MALE: Not "flood people out of their houses" rain. Just gold, old "swamp the intersections" rain.

MOOS: Stewart Shepard who was once a TV weather man described his video as boyish humor.

KEITH OLBERMANN, HOST, COUNTDOWN WITH KEITH OLBERMANN: It's not boyish humor. And you're a selfish hypocrite.

MOOS: MSNBC's resident liberal Keith Olbermann named Shepard worst person in the world. Wrote one blogger, "What's next? Praying for Obama to stub his toe? Have a car accident?"

But a supporter countered, "I'm praying for liberals to gain a sense of humor."

UNIDENTIFIED MALE: Would it be wrong to pray for rain?

MOOS (on camera): Would it be wrong in the event of rain for Senator Obama to have a Diana Ross moment?

(voice-over): 25 years ago as a cub reporter, I covered Diana Ross' famously stormy...

DIANA ROSS, SINGER: Don't push!

MOOS: ...Concert in Central Park. Must have felt like -- with rain dripping off her.

ROSS: You could be good to me by everybody gradually and calmly leaving the park.

MOOS: Now, would you pray for that to happen at Senator Obama's acceptance speech?

UNIDENTIFIED MALE: Unforecasted rain that starts two minutes before the speech is set to begin.

MOOS: Focus on the Family has now removed the video saying it was "intended to be a spoof. This time a few of our constituents thought we were seriously asking people to pray for rain. Since we never want to mislead people on the important subject of prayer, we pulled the feature."

Remember the time the governor of Georgia seriously asked folks to pray for rain.

UNIDENTIFIED MALE: Pray up a storm.

MOOS: But that was in hopes of ending a drought. Be careful what you pray for, Mr. Shepherd. Sometimes if you don't poke out each other's eyes, rain can bring you closer. Jeanne Moos, CNN, New York.

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ROBERTS: Charging the troops.

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UNIDENTIFIED MALE: There's a lot more on their mind than have to worry or try to remember to get $100 reimbursement.

(END VIDEO CLIP)

ROBERTS: An airline hits soldiers with bag fees on their way to war.

Plus, the four-day workweek.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: My first instinct was is day care closes at six.

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ROBERTS: Why a three-day weekend could mean more on mom's plate.

(COMMERCIAL BREAK)

Welcome back to the "Most News in the Morning." It's six minutes to the top of the hour. Let's get you updated on our top story. The ceasefire between Russia and Georgia may be in jeopardy. Georgia's president accusing Russia of violating the ceasefire agreement just hours after it was signed. President Saakashvili says Russian tanks are, quote, "rampaging through the town of Gori." Though CNN cannot confirm that.

Russia strongly denies attack in Gori. But the foreign minister says Russian forces will withdraw from Georgian territory only after Georgian troops had return to their barracks.

For more on this I'm joined now by Richard Holbrook. He's the former U.S. ambassador to the United Nations. He's in Washington for us this morning.

Ambassador Holbrooke, you've had an op-ed in the "Washington Post" yesterday in which you described Georgia as, quote, "watershed moment in the west post-cold war relations with Russia." What do you mean by that?

RICHARD HOLBROOKE, FORMER U.S. AMBASSADOR TO THE UNITED NATIONS: Russia, since the fall of the Soviet Union, John, Russia has worked with the west. We've had our differences. But this is the first time in 30 years that they've sent their troops outside their own country. The last time was Afghanistan in 1978 under the Soviet Union. It's a terrible display, abuse of brutal power, against the small Democratic neighbor. And I think it's going to create whatever the outcome of this ceasefire that the French have arranged. And we should congratulate President Sarkozy and the Foreign Minister Kushner for doing this, by the way.

Whatever the outcome of the ceasefire, whatever's happening in Gori, the fact is that the Russian -- we have to look at the Russians through different lenses after this.

ROBERTS: Do you believe as many foreign policy experts do, Mr. Ambassador, that this is a return to the bad old days of imperialist Russia, and do you think that their ultimate goal is to re-annex Abkhazia and South Ossetia?

HOLBROOKE: I would say it's a return to the bad new days. Russia is not the Soviet Union. It doesn't have a crazy, anti-democratic ideology. But it is trying to become a hegemonic state. There are a lot of issues we have to work with with Russia just as we did during the cold war -- climate change, energy, international cooperation.

But we can't look at Vladimir Putin the same way after he exhibited the readiness to use unbelievable force against Georgia and do such destruction over issues which were preventable, predictable, and could have been settled by negotiations as, I might add, they were in 1999 when in a similar crisis, President Clinton sent his Deputy Secretary of State Strobe Talbott shuttling between Moscow and Tbilisi to settle the same issues over Abkhazia and South Ossetia.

ROBERTS: So, what do you think should happen beyond this? Senator John McCain is saying we should throw out Russia out of the G-8, pare it back to the G-7. That idea is starting to get some traction. British Prime Minister Gordon Brown hinted at it. What would you suggest?

HOLBROOKE: I don't want to sound cautious. This is not a political issue. Senator Obama whom I support and Senator McCain have roughly the same positions. And I'm dismayed to see some of McCain's supporters trying to politicize it in a national tragedy.

But going to the specifics of the suggestions, I'm going to punt, John. This does change things. But until we get the war stopped, until we get the Russian troops out of the Georgia, it's premature to talk about things like the G-8 and the 2014 winter Olympics in Russia, in Sachi. These are all issues that are going to have to be considered. Russia must know that there are consequences. But the first thing to do is to get this disastrous, tragic event over with.

ROBERTS: We should mention, as you said, you support Senator Obama. You have written the lead article in the new foreign policy magazine in which you compare the foreign policies of the two candidates. You do come down on the side of Barack Obama for the most part in this article.

But let me ask you, in terms of the response to Georgia, John McCain came out very quickly with a very forceful statement against Russia. It took Senator Obama three times to get to a similarly tough position. Has he got the foreign policy experience to be able to deal with a person like Vladimir Putin?

HOLBROOKE: John, with all due respect, I would dispute what you just said. Senator McCain and Senator Obama have roughly the same positions. It's the Bush administration that was behind the curve. President Bush embracing Putin, sitting next to him in Olympic stadium, having a most cursory talk and taking four or five days while he's playing volleyball in Beijing before he gets a serious statement. Meanwhile, the French are out there.

This is not a political issue. And you're just repeating spin from McCain supporters. Senator Obama was in the air on his way to Hawaii. He put a short statement out, got on the plane. He understood the severity of the issue instantly. And he followed it carefully. He talked to President Saakashvili by phone and his position is absolutely correct.

And I am not criticizing Senator McCain's position either in this case. I just think we ought to recognize this as a historic event and it's not a time for the kind of politics which some of McCain's supporters have been putting out recently.

ROBERTS: With respect, Mr. Ambassador, and you and I have known each other for a long time and quite well, I'm not repeating Republican spin. Just looking at what happened on the ground. They were three positions by Senator Obama, each one successively tougher. John McCain simply had the one statement. Let me, let me --

(CROSSTALK)

HOLBROOKE: Because, John, the situation was evolving. Obama's statement which came immediately was a place holder statement. But as the situation move, he was on the plane, out of touch on his way to Hawaii.