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CNN Live Event/Special

America Under Attack: Attack Shuts Down Financial Markets

Aired September 12, 2001 - 18:00   ET


AARON BROWN, CNN ANCHOR: Judy, thanks. I'm just going to stay off to the side here and allow the camera to stay focused on the scene. We were keeping our eye on that gray building in -- I wish I could see the monitor better, let me just look at it -- roughly the tallest building I think you can see. Gary Tuchman, who has been down on the ground, and in fact, one of the few civilians into the ground zero area.

Gary, can you hear me? Gary Tuchman, are you able to hear me now?

GARY TUCHMAN, CNN CORRESPONDENT: Aaron, I hear you fine. I want to tell you, an hour and 15 minutes ago, as you said, I was at ground zero with 1,000 to 2,000 rescue and recovery workers at the scene. They are all being evacuated as we speak, most of them are now gone, because of that One Liberty Plaza building, which is just to the east of the World Trade Center complex.

We have talked to rescue workers who tell us they saw the building starting to twist, and then said they saw some windows starting to break.

BROWN: We are seeing the windows breaking from where we're standing. We can see the windows falling out, or facing falling out.

TUCHMAN: OK, you have another angle, and you certainly have a better than me, because from our angle, we're to the north of the building, we haven't seen the windows. So, it's interesting information. I want to tell you, Aaron, that there are a lot of people who are at the site who are very frightened by that, because they had told us while we were there that they were quite worried about one or two of the buildings surrounding the World Trade Center complex. They had told us that while we were there, and now they're living through it.

We can also tell you the media has been pushed back several blocks also, from the perch that we were at about four blocks away from the World Trade Center complex.

BROWN: Gary, if you can -- and if you can't, just quickly say so -- orient me here. I'm standing here looking at what was Building 7. I look to my left, to the east. The tall gray building, I believe, is One Liberty Plaza.

Do I have this right?

TUCHMAN: You have it absolutely right, Aaron. The tall gray building is One Liberty Plaza. There was some confusion initially, because across from One Liberty Plaza is a hotel called the Millennium Hotel. Some people thought that was the building in question. That building apparently is not in danger of collapse. It's the One Liberty Plaza, the tall gray building.

BROWN: OK, and now, also -- just stay with me, Gary, if you will, please -- what was left of the South Tower of the World Trade Center, the South Tower was the second of those towers that were struck yesterday by the plane, what was left of it collapsed upon itself a bit ago, a while ago -- whether that impacted the One Liberty Plaza building, whether that made it more unstable or not, we just don't know.

TUCHMAN: It's hard to tell, Aaron. But as I was telling you, while we were talking in our last hour, those pillars from that South Tower looked very precarious. It looked like Stonehenge, in Salisbury, England, the way it was standing up. It looked precarious. They were very concerned about that, so people are not surprised that happened.

I also want to tell you one other thing about One Liberty Plaza. It is set up to be the triage unit, but unfortunately, there's not a problem with evacuating it right now, because they haven't found any survivors recently to put in the triage unit.

BROWN: All right. That's One Liberty Plaza. Let's do this. Let's just keep an eye on this for a bit. Among the businesses in One Liberty Plaza, the corporate offices, the executive offices of the Nasdaq, of the stock markets, Wall Street, is right here in this part of town.

"MONEYLINE" anchor Lou Dobbs joins us now. While there has been no trading here, there has been business going on around the world, and Lou can update us now on that -- Lou.

LOU DOBBS, CNN ANCHOR: Aaron, thank you very much. Indeed, the building you're looking at, the new headquarters of the Nasdaq, it, like the World Trade Center towers themselves, in the heart of downtown Manhattan, which is the heart of the world's financial capital. And, indeed, the World Trade Towers were at the center of downtown Manhattan, creating great energy for what is the center of Democratic capitalism all around the world.

Now all of that, of course, has been ruined by this despicable act of terrorism. We're only beginning now to learn the human toll, to learn about the property damage, the devastation. And the devastation, obviously, is not ended.

Against this backdrop, the leaders of the financial markets, financial and corporate leaders, meeting with government leaders today. Joining together, trying to determine when they might be able to reopen for trading. We now know that for only the second time since the end of World War II, the stock markets will be closed not for two, but for at least three days. And as yet another building threatens now to collapse in the complex, we know that the markets will be closed for a third straight session. That has not happened, by the way, since the Great Depression of 1933.

Those markets, as I said, have been closed now for two days. They will be closed again tomorrow. Christine Romans is here now and has more for us on that part of the story -- Christine.

CHRISTINE ROMANS, CNN CORRESPONDENT: Lou, it's an unprecedented tragedy for New York's financial district and for world markets, and a rare occurrence in financial market history as well. U.S. stock markets will be closed for three straight weekdays.


UNIDENTIFIED MALE: We are committed that the equity markets will resume operations no later than Monday. The group that gathered today will gather again tomorrow, with the idea that we may well be in a position to resume trading as early as Friday.


ROMAN: Grim exchange officials and regulators chose the path of caution. The worry, of course, is that keeping stock markets shut will only exacerbate the nervousness and the uneasiness in the market that causes people to sell. A big sell-off is already expected when stock markets open.

In the meantime, bonds and bond futures will begin trading tomorrow.


UNIDENTIFIED MALE: The bond market functions more appropriately, and best, when the stock market and the bond market are trading together. But we can certainly trade bonds without stocks for 24 to 48 hours.


ROMANS: Given the extent of the crisis smoldering in downtown Manhattan, economists say caution was the best path to take. But they do fear there could be panic selling when markets do open.


UNIDENTIFIED MALE: I strongly urge investors to sit tight, because it will be that, simply panic selling. Nothing fundamentally has changed.


ROMANS: Lou, people on Wall Street clearly would like to send a signal -- get stock markets trading again, show that democracy and capitalism can't back down. But they say the human toll and the recovery and the healing comes first. DOBBS: And of course, as Aaron Brown has been reporting, when One Liberty Plaza, one of the tallest remaining buildings and certainly one of the most important itself, is in some danger of collapse, apparently, as well. And there are other buildings there as well. It is all but impossible, with any assurance, for these leaders to put these markets open, at the risk of any employees' life, of which there has already been such a devastating loss already.

Christine, thank you very much.

Well, the brokerage firm, Morgan Stanley, some 3,500 employees resided within the World Trade Center. It was, in fact, the largest tenant in the World Trade Center, 3,700 employees across 20 floors. Many of those workers tonight remain unaccounted for.

Peter Viles now has the story for us.


PETER VILES, CNN CORRESPONDENT (voice-over): The second terrorist attack was a direct hit on the office space of Morgan Stanley. The firm had 3,500 workers in 22 floors, almost exactly in the area where the second plane hit. But incredibly, most of those employees had already fled the tower, minutes before the explosion.

PHILIP PURCELL, CEO, MORGAN STANLEY: Miraculously, I'd say, we had 2,500 people in the World Trade Center Two thousand people in the World Trade Center. It appears that a vast majority got out safely.

VILES: A miracle made possible by the firm's split-second decision to evacuate the South Tower immediately after the North Tower was hit.

PURCELL: We have a lot of stories of courage, a lot of stories of compassion. And, uh, we're going to be fine.


VILES: As you can see, a very emotional Philip Purcell. No official word from Morgan Stanley on how many of its employees are unaccounted for at this hour. But we have canvassed many other firms in that complex -- this is a very partial count, we must stress -- but we do know at this hour that other firms in that complex are telling us that 2,700 workers in the complex remain unaccounted for. And that, we must tell you, is a very partial count -- Lou.

DOBBS: And the toll is just unspeakable in point of fact.


VILES: And as we see behind us right now, the damage to these structures continues.

DOBBS: Peter, thank you very much. Airports tonight remain closed throughout the country. Officials say now that they will not reopen until new security measures are put into effect. As a result of those closures, airlines, of course, are losing millions of dollars in revenue. That is simply the latest hurdle for this industry. Airlines have watched their profits fall dramatically over the course of the past two years, and the economics slowdown has done nothing but accelerate that to losses.

Kitty Pilgrim now takes a look at the industry.


Well, with air traffic at a standstill, the disruption of commerce is almost incalculable. But that does not stop economists from trying to asses the damage. Now, the airline business in this country generates about 90- to $100 billion in revenues, and that's just domestic travel. That's 4,000 planes a day. A little more than half of that business is business travel, which probably will see a drop-off in months to come. And leisure travel may also dry up. So losses work out to about $250 million a day.


UNIDENTIFIED MALE: I'm sure it will be a gradual flyback, probably on the West Coast, you'll see the flight activity come back before the East Coast. But really, what I'm concerned about right now would be the lingering effects of the fear of terrorism, the impact that will have on airline bookings, and overall consumer confidence.


PILGRIM: Also, Midway Airlines, which has been teetering on the brink of bankruptcy, announced it will suspend operations, saying that they don't have the resources to reorganize in this environment.

In terms of temporary disruption, retail sales and consumption, that's 2/3 of the economy, it's about $300 billion a month. Now, economists calculate even a two-day disruption of shopping and purchases would add up to $15 billion -- that's a 6 percent decline for the month. This could be seen yesterday at many malls, many were deserted. A smattering were closed for security reasons, for example, the Mall of America in Minneapolis -- Lou?

DOBBS: Kitty, thank you very much.

The cost of yesterday's deadly attack in New York City will not, of course, be known for months, in all likelihood. Some experts are already calling it the most expensive manmade disaster ever. Insurance claims alone are expected to reach $15 billion.

Greg Clarkin joins us now from lower Manhattan with the details of that part of the story -- Greg?

(BEGIN VIDEOTAPE) GREG CLARKIN, CNN CORRESPONDENT: The attacks on the World Trade Center struck at the heart of Wall Street, New York's primary economic engine. But the attacks may also have a severe impact on the city's second biggest economic driver, tourism. And it's the impact on tourism that has many worried. More than 37 million people visited New York City last year, spending more than $17 billion on everything from restaurants to Broadway Shows to hotels. And when job creation and other factors are figured in, it's estimated tourism has a more that $25 billion impact on New York City's economy.

UNIDENTIFIED MALE: This is a clear negative blow to this economy. You know, one of the important and growing industries in New York has been tourism. And certainly, this kind of heightened terrorist activity will frighten away tourists.

CLARKIN: There are numerous other areas which could be hit hard as well. Retailers, big and small, are already suffering, with stores closed in lower Manhattan, as the cleanup efforts continue. And some believe it may be a while before New Yorkers take to the stores.

UNIDENTIFIED MALE: The consumers stay home. They want to watch television. They want to watch the events unfold throughout the day, all night, as we did, as everybody across the country did. The last that they're thinking about is going out and buying a new shirt.


DOBBS: Well, in any tragedy -- and this tragedy is unspeakable in its dimensions -- there are unfortunately some who will try to take advantage of others. Deborah Marchini is here now and has for us the story of what is simply price gouging by some, particularly in the area of gasoline.

DEBORAH MARCHINI, CNN CORRESPONDENT: That's right, and particularly in the area of the Midwest. It's interesting, Lou, because the attack, of course, devastated New York and Washington, but the spike in gasoline prices and the long lines, as well, were mostly in the Midwest. At scattered stations in Indiana, Ohio and Oklahoma, for example, we saw prices ranging from $2.99, all the way up to $5.19 a gallon. Now, the region is especially vulnerable to any interruption in supplies, and consumers there know it.


UNIDENTIFIED MALE: It's like what I call the St. Louis snow effect. One of the things that we see in St. Louis -- we have about four snowstorms a year. And they're typically not a big deal, doesn't disrupt traffic for very long. But if you go to your local grocery store, you'll find 10 registers running full open with customers 10 deep, all buying milk and bread. And I think American consumers have been trained to believe that if there is some impact that could involve the Middle East, you better gas up. And that's what they did all at once. And the supply system is not geared to handle that sort of surge in demand.

(END VIDEO CLIP) MARCHINI: And the problem is demand, because supplies were not affected by the attack. The American Petroleum Institute, for example, reported today that fuel inventories rose by about 159,000 barrels. Now, major oil companies, including Exxon Mobil and BP Amoco, froze prices to wholesalers. Chevron promised to exercise restraint, and Conoco wouldn't comment.

Lou, the promises are really public relations. Most of the major oil companies don't own their gas stations, and so can't control what those retailers charge.

DOBBS: It's an extraordinary situation that anyone would take advantage here. I guess one of the first things we should do is take our hats off to ExxonMobil and BP Amoco, for having the courage to freeze those wholesale prices and exact whatever discipline they can.

I'll tell you that I'm sure that we and other news organizations are committed to publicizing those companies which both hold the line appropriately and with integrity, and those, certainly, who fail to do so.

MARCHINI: The glare of publicity has already resulted in some service stations at least lowering the prices they jacked up yesterday.

DOBBS: How much of this are we seeing in other industries?

MARCHINI: We're not seeing very much of it in other industries at all. We have heard scattered complaints by consumers about car rental companies, but no real evidence that they've changed their rates at all. The same is true with hotels, and stranded travelers around the country...

DOBBS: what can be done here?

MARCHINI: The interesting question is, from a legal standpoint, there isn't very much. You know, from a federal level, you have to prove that oil companies colluded, or oil gas stations colluded when they raised prices. They're no more likely to be able to prove that than that banks colluded when they raised the prime lending rate.

On a state level, some states have legislation in place that allows them to act, other states just simply do not. It is not against the law to raise prices.

DOBBS: OK. Well, it's against a lot of other laws. Deborah, thank you. Deborah Marchini.

Well, the world, of course, is struggling to address the magnitude of this tragedy and its effect on the worldwide economy. One economist today warning that a "full-blown global recession is highly likely," end quote. Another said that while there's always talk that disasters have extreme consequences, "they rarely do."

Let's go now to someone who should know about such things, our economics correspondent, Kathleen Hays. Kathleen, welcome, and over to you.

KATHLEEN HAYS, CNN CORRESPONDENT: Thank you, Lou. Thank you very much. Well, I would like to start by saying that the president of Dallas Federal Reserve bank, Bob Mintier, pulled himself together and gave a speech today in Texas, and one of the things he said about the economy is it's too soon to assess the macroeconomic consequences. I think we're going to be hearing that kind of commentary from Fed officials for the next few days. They need to see things settled. They especially need to see the financial markets open and get going again before they really make any conclusions.

Beyond that, it's ironic that rebuilding after this calamity is going to be a stimulus to the economy. We'll see a larger GDP at some point. We won't see a subtraction for all the destruction. In the near term, Kitty Pilgrim just talked about the impact on retail sales, Deborah just talking about this big spike in gas prices. Now, that's going to take money out of people's pockets. A very important question is consumer confidence. It's fragile. We know the economy is weak, and now the question is: what will this do? So it's a big question, in terms of the economy.

And, of course, there is also some questions about the Federal Reserve. Mintier also in his speech today made the point that the Federal Reserve is fully functioning, and while people are talking a lot about what size interest rate cut we're going to get, the first thing the Fed is doing is making sure that there is plenty of liquidity for the banks, for the financial markets, to keep going.

DOBBS: Well, Kathleen, you make a very important point, talking about liquidity versus interest rate cuts. A lot of focus, until this tragedy, on interest rate cuts. But moving $80 billion of liquidity into the world financial systems, as the central banks have done, is, frankly, far more appropriate.

HAYS: Absolutely. Because, as you know, the thing we have to do is maintain confidence in our financial system, and that's one of the -- that's one of the Fed's first priorities, is to back up the system in times of distress. You remember in the 1987 stock market crash, one of the first things Greenspan did was to come out and say the Fed stands ready to provide liquidity.

DOBBS: And the confidence that's being asserted in these market, the New York Bond Club had canceled its meeting for tomorrow night, and we learned today that indeed that's been changed.

HAYS: That's very interesting, isn't it, Lou? Very important, that apparently the White House said no, don't cancel the speech. We want Mr. Lindsey to speak. Again, we want to show the world that we are still up and running. Parallel to that, the Bond Market Association, which apparently is calling for trading tomorrow -- this is a recommendation, now, make that clear. Nobody has to trade, and the dealers themselves have a lot of questions about the phone system. Only one broker right now is fully functioning.

But apparently, I spoke to a couple of people who are members, and they say that there was considerable urging, if not pressure, from the Treasury Department to, if you please could, go out and trade tomorrow.

DOBBS: And we should be clear, the men and women who run these brokerages and these bond houses, they want that trading restored as well, to establish vigor and stability in the world of fixed income markets as well.

HAYS: And don't you get the feeling when you talk to people, too, that so many people have lost colleagues, comrades, and I think also, maybe out of respect for them, to keep going and to maintain a very strong tradition and pride. These people are really have as professionals in their business.

DOBBS: You see, in a tragedy like this -- and fortunately, there has never been a tragedy like this, with its dimension -- that Wall Street is about a lot more than simply money and greed and fear. It's about a commitment to a way of life as well. And we're going to see that amply demonstrated, I know we're all sure, over the next several days.

Kathleen, thank you. Kathleen Hays.

Well, in the wake of yesterday's attacks, Washington is taking dramatic steps to ensure financial stability, both here and abroad. Tim O'Brien has that part of our story tonight -- Tim?

TIM O'BRIEN, CNN CORRESPONDENT: Lou, the Bush administration and the Federal Reserve have acted firmly over the last 36 hours to assure the safety of the U.S. financial system, even with some senior U.S. officials traveling overseas. Alan Greenspan was back at the Fed by early afternoon, returning via U.S. military jet from meetings in Switzerland.

But even from Europe, the Fed chairman did direct the injection of billions of dollars of added liquidity into the system. The Fed also made what it calls a substantially higher level of loans directly to banks yesterday through its discount window. The Fed tells MONEYLINE that it will keep that source of liquidity available past normal working hours today to ensure stability.

Greenspan and the Fed are acting in concert with other central bankers, pumping a reported $120 billion of added liquidity into world markets. Meanwhile, Treasury Secretary Paul O'Neill is returning to Washington, cutting short an official visit to Asia. O'Neill called the nation's financial markets strong and resilient, and expressed his belief they would continue to operate smoothly.

The International Monetary Fund has also been watching world markets. While expressing dismay over the attacks against the U.S., IMF Managing Director Horst Kohler issued a statement saying the IMF projects only a limited impact on the international economy. The IMF and World Bank are also facing suggestions from city officials here in Washington that they postpone, or cancel their annual meetings scheduled for September 29th and 30th here. Sources at both organizations tell MONEYLINE no decision has been made, but the issue will face serious discussion in coming days -- Lou?

DOBBS: Tim, thank you. Tim O'Brien from Washington.

Well, I'd like to close with a few personal words tonight. As we have looked at the devastation, we continue to watch what is apparently the collapse of further structures in downtown Manhattan, there is an overwhelming sense of loss here. The men and women you listen to each night here on CNN all have friends, people we have worked with, people we talked with, to bring you the best information we can about markets and this economy every night.

But as we share the pain and the loss, we also know that as this rebuilding begins, that we will, in point of fact, renew commitment to larger ideals, something called Democratic capitalism. This remains the heart of that spirit and that effort, and I believe firmly, you will see that come to reality in the days and the weeks ahead, as we build anew.

I'm Lou Dobbs in New York. Good night. And now Aaron Brown.

BROWN: Lou, thank you. Thank you for your work and your words there. We continue to keep our eye behind the smoke there on One Liberty Plaza. This is the building that, about an hour or so ago, officials started to evacuate people from ground zero, getting them out of there, because they began to believe that that building might collapse.

Periodically, we have seen pieces of glass, pieces of facing, fall off the building. It is very clear to us, as we look down on the scene, that almost everyone, not quite everyone has been moved back. One of the markers for us all day has been a fire truck which has been pouring water on Building 7 of the World Trade Complex, one of the buildings that collapsed. That fire truck, about 10 minutes ago, stopped pouring water and is now, at least it so appears to me, backing out of there. Again, this is just eyeballing this. We don't see anyone down there that we would describe as a civilian. Everybody has been pulled out about.

About 10 minutes or so ago, Mayor Giuliani and Joe Allbaugh, the FEMA director, the Federal Emergency Management Agency director, walked to the scene. They walked to the scene. That is the situation. We keep our eye on the building and we go back to Judy Woodruff in Washington -- Judy?

JUDY WOODRUFF, CNN ANCHOR: Aaron, you are of course, recapping what we do know at this point about what's going on in New York. I know CNN, at one point, had confirmed that at least part of that structure at One Liberty Plaza had actually caved in. And I know we're going to follow it and come back to you as soon as need be, if something more happens there.

I will just tell that here in Washington, a flag was unfurled this evening at Pentagon, near the site of where the commercial jet plowed into that building yesterday. The flag there to welcome President Bush, who went to the Pentagon to look at the damage and to talk to workers to offer his consolation. I think you have to say, looking at that flag, that it clearly is a symbol that the United States, the Pentagon, and indeed the United States will prevail, no matter what enemies of this country might do to us.

CNN's Jon Karl, Jonathan Karl has been at the Capitol all day, talking to members of Congress.

Jonathan, bring us up to date from there.

JONATHAN KARL, CNN CORRESPONDENT: Well, two things you should know about, Judy. One is that there has been serious discussion among the members of the Congress here, both House and Senate, about whether or not there would be a need to have a declaration of war -- against who, it's unclear right now, but a declaration of war against whatever state or nonstate entities might have been involved in these attacks.

This is an idea that's been pushed very strongly by many Republicans, including Arlen Specter, who talked about it the on the floor of the Senate today. And also, on the Democratic side, Robert Torricelli talked about some kind of declaration of war -- part of the discussion here. But let me tell you, Judy, as you saw the Congress pass what it did pass today, which was a more generalized resolution condemning this and calling for support for the president in his response, you did see talk from many members that we are already at war.

The other thing I want to bring you up to date on is the question of how to pay for all the damage. Now, we do know that this morning the president himself did ask Congressional leaders -- I know you're going to talk to Tom Daschle shortly -- for essentially a blank check, for enough money as would be necessary to deal with this.

Congressional investigators here looked into what the precedent was. What happened when Pearl Harbor was bombed? Was the president given a blank check? Well, no. Congressional staffers here have looked into it. They have found, never has the Congress turned over the power of the purse to the president, even in a time of emergency, as is this. So right now, on both House and Senate side, you have appropriators working with the White House, trying to come up with a figure of how much money they would need to deal with this. And they are offering whatever money is necessary, but there will be a number.

I've been told it's going to be $11 billion or more. The House is hoping to actually debate this and have this on the floor of the House by tomorrow morning, providing the money that will be necessary to clean up what we're seeing in New York, and of course, do everything else that is associated with dealing with this emergency -- Judy?

WOODRUFF: All right. Jonathan Karl at the Capitol, and as you say, the Senate majority leader Tom Daschle does join us now.

Senator, what about that figure of 11 billion? Is that what Congress is going to end up offering the president? SEN. TOM DASCHLE (D-SD), MAJORITY LEADER: Well, Judy, I think it's premature to come to any conclusion as to what the figure will be. I think we can say for absolutely certain that we're going to use whatever resources may be required. We'll work with the administration, we'll get our best assessment as to what the costs will entail, and we will appropriate that amount. But there will not be a dispute in this city about the amount of money to commit to, because we're committed to doing all that it takes to make sure that the resources will be there.

WOODRUFF: Well, Senator, when it was clear that the Congress would not offer the president a so-called blank check, what does that mean the president would not get that he'd be asking for?

DASCHLE: Well, the president hasn't asked for a blank check, to my knowledge. What he has said is that he wanted to work with us to find the appropriate amount of resources that will be required to ensure that we can address all of the many, many challenges that we know we're going to face. What we have said in return is that we are prepared to work with you to come up with whatever requirements may be necessary through appropriations, and that's where it's been left right now. We'll know a lot more, and we'll be a lot more specific, as we have time available to us to make those decisions and to acquire the information required.

WOODRUFF: Senator, what should the United States do now, by way of retaliation?

DASCHLE: Well, I think the most important thing we can do now, first and foremost, is to recognize the tremendous loss, Judy, that has been experienced. I don't think that anyone ought to minimize that, and any time we talk about future action, we've got to go to where the real tragedy lies, and that's with the loss of families and the loss of so much of human life in the recent -- in the last 24 hours.

Beyond that, I think it's important for us to gather all of the information. I think everybody is so angry they want to hit somebody. But before we hit somebody, we better know who this somebody is. We better have our facts, we better have our information, and we better have a plan.

WOODRUFF: Senator, as I'm talking to you, we're looking at pictures of President Bush visiting the Pentagon a little while ago, meeting with employees there, obviously offering his condolences, talking to people, having inspected the damage. This footage, we just got, and we're showing our viewers these pictures.

Senator, while we look at these shots of the president visiting the Pentagon, people are asking -- I hear what you're saying about wanting to make sure that everything is done to take care of the victims. Of course, we all feel that way.

But there is a strong feeling that -- and it's been expressed not just by the administration, but by others, that the United States cannot let something like this stand. And my question to you is, what does that mean?

DASCHLE: Well, we will not let it stand. We will punish the perpetrators, we will take action, and we will show our resolve. But I think we, as we have in so many cases in the past, we have to be smart about it.

We knew who the enemy was that bombed Pearl Harbor. We know who the enemies are in most cases involving war. I think we need to ensure we can identify the enemy, identify the locations of the enemy and make sure we've got a plan put into place that will allow us the maximum degree of ability to punish those responsible.

That can't happen tomorrow. It can't happen within the next couple of days, for sure. But it will happen. I think we just have to ensure that we have all of the pieces together prior to the time we make it happen.

WOODRUFF: But Senator, when the President, when Secretary of State Powell and others say we are not just going to go after the terrorist, we're going to go after those who are harboring the terrorists, don't we have a pretty clear idea of what countries, what states, have harbored, have offered aid and comfort to these people?

DASCHLE: Well, I think there is general understanding of that. Obviously, as we look to what we're going to do now, we're going to have to take that into account. And that is part of this fact gathering process that must now be underway.

But clearly, we've got to have more than just that, some vague notion of where these terrorists have lived in the past. We've got to know with a lot more precise detail what exactly we're going to do about it, and what warning we're going to give, and what actions may be required of those who may still be harboring terrorists today.

WOODRUFF: But Senator, at the same time, I'm hearing calls and reading calls from those who say, we shouldn't wait for the judicial process to work its way, for there to be a long drawn out investigation, and court proceeding, that the United States needs to move more quickly than that.

DASCHLE: Well, I don't know that I disagree with much of that. I do think though, that it is important for us to ensure we do this smartly. I'm not saying do it with every legal question answered, because we may not be able to resolve all of these questions legally, but we do have a responsibility to do it correctly, and to do is swiftly, but do it with all of the facts. And that's exactly what I think this country's doing today.

WOODRUFF: What do you mean by swiftly? Can you put some sort of timetable on?

DASCHLE: No, I think it would be a mistake to put a timetable arbitrarily on whatever actions we're going to take. We know it's going to be done. We know actions will be taken. We just ought to be patient, but also continue through other actions, to show our resolve. We did that today on the Senate and House floor. We are going to continue to do that in our work and cooperation with the President of the United States and this administration.

WOODRUFF: Senator, I'm talking to you as we've just been continuing to watch the raw footage, pictures of President Bush visiting with employees, both military and civilian at the Pentagon. And I want to apologize to our viewers. Those pictures were pretty shaky. And as I say, it was unedited. We aired it just as it came in.

One final question, Senator Daschle, how long is this spirit of cooperation between your party, the democrats and the Republicans going to last in the aftermath of this terrible tragedy?

DASCHLE: Well Judy, on matters pertaining to this crisis, I hopes it lasts until the very, very last moment it's required. We have a new day, a new crisis, a new challenge. And I think therefore, a new responsibility. And we're going to live up to that responsibility to the very best of our ability, regardless of how long it may take.

WOODRUFF: And finally, when does the Congress get back to business?

DASCHLE: We're going to take up the Commerce and state justice appropriations bill tomorrow. That was the pending business on Monday and we hope to complete it this week.

WOODRUFF: All right. Senator Tom Daschle, who is the majority leader in the United States Senate. Thank you very much. Good to see you Senator.

For more in the aftermath of this tragedy that has shaken all of us, for more now on the emotions of the people who have been affected by it, CNN's Candy Crowley now.


CANDY CROWLEY, CNN CORRESPONDENT (voice-over): At daybreak, the nightmare was still there. Smoldering and burning, defying the imagination, thwarting rescue efforts and testing an untested President.

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The United States of America will use all our resources to conquer this enemy. We will rally the world. We will be patient We'll be focused. And we will be steadfast in our determination. This battle will take time and resolve. But make no mistake about it, we will win.

CROWLEY: Eight months in office, President George Bush is already writing what may be the most important page of his own legacy. In an unusual revelation, officials said both the White House and Air Force One may have been targets.

The news shed some light on the President's first hours following the attacks, when instead of returning immediately to Washington, he flew from Florida to a military base in Louisiana and another in Nebraska. Today in both New York and Washington, the precarious nature of the rubble and the hellish heat of the fire frustrated attempts to reach the wounded, the dying or the dead. Still in Manhattan, they rescued alive and reasonably well, nine firefighters and police officers who had been buried beneath the debris, their recovery fueled around the clock search that runs mostly on adrenaline and hope.

UNIDENTIFIED MALE: I think once the claims and the iron workers start getting the big stuff out of the way, we can get in there and do some, you know, nit-picking and maybe find some guys. There's a lot of (INAUDIBLE) it seems down there. So maybe there are some guys available. CROWLEY: But at the Pentagon, hope is gone. Officials say whoever might have survived the concussion of the plane's impact could not have lived through the fires that came after. There's no official estimate of how many lives were lost at the Pentagon or the World Trade Center. Authorities say they don't know, but everybody knows it will be awful.

The FBI says it's identified most of the suicidal terrorists on the planes. Now they search for those behind the mayhem.

UNIDENTIFIED MALE: We also have identified through a number of leads, principally at the cities of origin, a number of individuals whom we believe may have had something to do with the hijackings. And we are pursuing those leads aggressively.

CROWLEY: It is a very public man hunt. The FBI conducted a shoulder to shoulder search for evidence outside the Pentagon. Authorities in Providence, Rhode Island halted and boarded a Washington-bound Amtrak train, detaining at least one passenger. A SWAT team descended on a Boston hotel, in search of suspects. No arrests were made. Authorities also searched a Vero Beach, Florida home and questioned others in the southern Florida area. The visibility of the efforts backs up the clear message from all arms of the federal government.

COLIN POWELL, SECRETARY OF STATE: We will find who's responsible for this, and they will pay for it.

DONALD RUMSFELD, DEFENSE SECRETARY: I guess I'm kind of old fashioned. I'm inclined to think that if you're going to cock it, you throw it.

CROWLEY: Terrorism's reach goes far beyond the areas of immediate destruction. The nation's airliners still aren't flying, as the FAA institutes new security requirements and carriers search for ways to comply.

Wall Street remains closed. And for a second evening, they'll be no major league baseball. The all-American past time canceled by this un-American horror. Symbolically, personally, financially, the country is so wounded. The totality of the loss is incomprehensible, but the details are unbearable.

UNIDENTIFIED MALE: Someone on the 104th floor worked for the good firm of Cantor and Fitzgerald. We can't find hardly anybody from that firm, who called his parents, told him he loved them and they haven't heard from him since.

CROWLEY: There are stories like it everywhere. People, knowing they were about to die, calling home to say, "I love you." People running their lives and then stopping to carry a stranger to safety. The story here is that what prevailed in the final moment in the face of death is not fear or hate, but love and courage.

Candy Crowley, CNN, Washington.


WOODRUFF: And those are the stories that bring us down and lift us up at the same time. Our Jonathan Karl was reporting just a little while ago. And I also was talking with House Democrat -- or sorry, Senate Democratic leader Tom Daschle a minute about appropriations to pay for the cleanup, the crisis of this crisis.

I'm told that the chairman of the House Appropriations committee is reporting that now the House and the Senate have agreed on a figure of $20 billion in emergency supplemental payment that would be spent at the desire of the administration, the White House, to deal with the crisis.

The House and Senate are going to take this supplemental up tomorrow. They plan to have it on the President -- President Bush's desk by the end of business, by the end of the day tomorrow.

Aaron, back to you in New York.

BROWN: Judy, thank you.

We continue to keep our eye just to the left of what was Building 7, this large gray building, One Liberty Plaza. When we first heard the concern that this building might come down, we saw windows and facing on the west side. The right side of your screen popping out.

Now we can see them. We suspect you can, as well. Yes, indeed. Some of the windows now further to the east, more to the center of the building, on the seamline there, starting to pop out, also.

A large number of ambulances, one, two, three, that I could see. Four, five, six, seven, at least that I can see, have moved into the area, moving towards the area as we talk to you now. People have been pulled out.

Though you still, and Danny, I'm not sure if you can see it or not on the shot you're on. There's still a fair number of fire officials in that blown out area that is right -- was a street yesterday. And it's now just a kind of wasteland there, just ahead of the fire truck.

There's still a fair number of people there. And we watched that building. And just for a moment, think about the implications here, that building, if it collapses. causes collateral damage. If the building doesn't collapse, but remains a danger to collapse, the rescue operation, if not totally shut down, is largely shut down. I'm sure smarter people and I are figuring out how they're going to deal with this, but they have an enormous problem, about a 60 story problem just to the east of the Trade Center.

Some of the most fascinating reporting that we have heard today has come from CNN's Miles O'Brien. Miles has been following the flight paths and whatever information on board the four hijacked airplanes he could gather, as he worked his sources and his computer and the rest. Miles joins us in Atlanta now with more on the detail, in some cases shocking detail of what he's been able to learn -- Miles.

MILES O'BRIEN, CNN CORRESPONDENT: Shocking, horrifying, it all applies when you start looking at these four doomed flights, Aaron. Take a look here. This is the track of the two flights which left Boston. They were headed to the West coast. Ultimately, of course, they ended up right near where Aaron is, striking the World Trade Center, eventually leveling them.

Those flight paths are somewhat more clear cut when you consider the goals of the terrorists. The flight that has caused us great interest today is this one, United Airlines flight 93, which left from Newark airport, made it as far as Cleveland, and did a 180 degree turn, and seemed to be heading in toward the Baltimore/Washington area.

Unclear what the target was, but the question that has been on our minds all day long is why did this plane crash here? Was there perhaps some sort of struggle inside the cockpit of that particular aircraft? And we do know more about that now. But first, let me tell you a little bit about some of the other flights and what was going on onboard.


(voice-over): Nothing seemed to miss when American Airlines flight 11 left the runway in Boston Tuesday morning. The 767, 200 was about half full, toting 81 passengers, a cockpit crew of two and nine flight attendants to the opposite coast. The captain likely planned for five hour flight. So there was roughly 8500 gallons of jet fuel in its three tanks.

FAA radars track the airliner as it followed the flight plan. But then about 20 minutes into the flight, somewhere over upstate New York, it turned sharply to the south. Flight 11 was hijacked apparently by knife-wielding men.

Airline pilots are trained to handle such situations by keeping calm, complying with requests, and if possible, dialing in an emergency four digit code on a device called a transponder. It transmits crucial flight data to air traffic controllers.

The action takes seconds, but it appears no such code was entered. But in the cabin, a frantic flight attendant managed to use a phone to call American Airlines Command Center in Dallas. She reported the trouble. And according to the Christian Science Monitor, a pilot apparently keyed the microphone, transmitting a cockpit conversation. The hijackers could be heard saying, "We have more planes, we have more planes." Radio transmissions like this would have been recorded on the ground by the FAA.

JOHN WELLS, "BOSTON HERALD": The police have identified five suspects that they believe were involved with this terrorist act. And two of whom may be brothers, apparently, reportedly. Two of whom, two others may have flown in from Portland and originated in Canada.

M. O'BRIEN: About five minutes before flight 11 started heading south, another 767, United flight 175 left Boston also for Los Angeles. 65 souls aboard. 15 minutes after becoming airborne, it veered off course. One passenger made two calls to his father. In one exchange, he said a flight attendant was stabbed. In the second call, he told his dad the plane was going down.

JOHN TEERLING, FORMER AMERICAN AIRLINES CAPTAIN: They knew not to carry guns on the airplane. If they fired it off a bullet, they mean could have explosive decompression on the aircraft. They knew what they were doing. And knew what their mission was, obviously.


M. O'BRIEN: We know what happened next. The 767 struck and ultimately leveled the World Trade Centers twin towers.

TEERLING: I know pilots. If you're going to die, you're not going take -- you're not going to fly in a World Trade Center to do it. Yes, there would be a struggle, major struggle.


M. O'BRIEN: Which brings us to the story of Jeremy Glick. Jeremy Glick was a passenger on board United Airlines flight 93. Newark to Los Angeles was the intended destination. According to his family, he made a phone call after the plane became commandeered somewhere around here in the Cleveland area.

He asked them to confirm reports that other passengers had heard from talking to their family members that in fact a plane had already crashed into the World Trade Center here in the New York area. When that was confirmed by his family, he dropped the phone for some time, came back to report to his family, that the male passengers on board United Airlines flight 93 had voted to attack the hijackers. Dropped the phone again, and the rest we can only surmise. But this flight did not make it to what appeared to be its intend target, the Washington, D.C. area. If you're looking for heroes, the passengers onboard that plane, obviously now perished, would be them -- Aaron.

BROWN: Miles, there are going to be no shortage of heroes here, as we keep our eye on One Liberty Plaza, about eight blocks from where we are. As windows continue to pop out of that building, just in the last five minutes or so. Another half dozen ambulances, rather, have moved in. Look, I can't honestly tell you that these ambulances that I now see were not in another part of the staging area, too close to that building and have been moved around several blocks and back down. That is certainly possible.

It is also possible that they are very concerned that this building's coming down. And they want to make sure that they can treat the people who might be hurt. Now which one of those possibilities, I honestly can't tell you. I can tell you that there is sea of ambulances down there.

Patty Davis has been covering today, transportation questions. I think all of us have known, that flying, at least in the near term will not be the same. And in fact, the rules are changing.

Patty, good evening.

PATTY DAVIS, CNN CORRESPONDENT: Certainly changing, Aaron.

The FAA has said that it is now accepting flight plans from some commercial airlines to get back in the air. Now that only applies to a limited number of flights, those that were diverted yesterday when these acts of terrorism occurred. Both domestically and those that are in Canada were diverted in Canada, will be allowed now to come into the United States.

Now Transportation Secretary Norman Mineta says those limited number of flights will operate under much tighter security.


NORMAN MINETA, TRANSPORTATION SECRETARY: Only passengers on the original flights will be allowed to reboard under strict security, and only after airports and airlines have implemented strict screening measures.


DAVIS: Now the ground stop continues for most other flights. Only diverted flights are being allowed to follow their flight plans with the FAA. The FAA saying the ground stop continues, has been extended. No timetable for all those other flights has been set at this point.

FAA says though that those flights will not resume definitely before sometime tomorrow. And of course, all those airports and those airlines have to meet these new tougher restrictions, these security restrictions that the FAA has now beefed up.

Those include no knives, including plastic knives, on board airlines. No curbside or off airport check-in, only ticketed passengers will be allowed past the metal detectors, as the secretary said. Higher standards for security personnel as well. And there will be more federal air marshals, it should say air marshals in there, at large airports. Also, we are told that anyone with an e-ticket, who normally would go directly to the gate, not allowed to do that any more. Even if you have a boarding pass issued from your travel agent, you will no longer be allowed to go directly to the gate. Everyone must stop at the ticket counter and check in -- Aaron.

BROWN: Thank you. Mike Miller is with "Aviation Daily," as we keep our camera posted, here on One Liberty Plaza. And we'll just kind of watch this for a bit and we'll talk to Mike.

Mike, you know, maybe I'm about to say the unspeakable here, but I'm not sure that I'd want -- that there are whole lot of people out there that want to be the first person to get on an airplane tomorrow.

MIKE MILLER, CNN CORRESPONDENT: Yes, the thing that everybody should realize whose even considering traveling in the next couple much days is, because there's so much ambiguity today from DOT about exactly when anybody can do anything, that when it's all over, it still won't be over. There's still going to be confusion. The employees at the airport won't really know exactly what to do. There should a million people trying to fly tomorrow. Normally there'd be about a million this time of year. And yet, we have absolutely no direction about what will happen tomorrow, whether the planes will be allowed to take off first thing in the morning. So people with tickets still are in limbo.

BROWN: Well, help me on this, because it does seem to me that one of the problems, no matter when they lift this flying ban, is going to be, you've got airplanes in a lot of places where they're not necessarily supposed to be. And one of the things the airlines are going to have to do is figure out how to get that plane that was supposed to go New York to Cleveland into New York or into Cleveland because it's in Houston.

MILLER: Right. There's actually not as many planes in different places than you might think. Because most of the flights were shut down before 10:00 in the morning or so on Tuesday. So there's not a full day's travel schedule that's been disrupted. There are 250 planes in Canada that have to get back to the United States. And presumably, some of those will get back tonight.

But anybody who is considering traveling, who has been following this story, probably should try to be very flexible and say well, can you get me instead of San Francisco to Oakland, instead of Los Angeles maybe to San Diego, because there will be a whole big backlog of people that have been trying to get out for two days. And it's going to be a mess. I would think for at least the next week, probably further.

BROWN: And, you know, I guess it goes without saying, and we always say that just before we say something, that people need to allow, if in fact we get some flights in the air, and we start -- the country starts to return to some sort of normalcy, that they need to allow a lot more time than they even did before. I mean, the airlines would say 45 minutes. I think this is about right, half hour, 45 minutes before a domestic flight. Give me an idea of how much time you would say right now?

MILLER: Well, just my own personal approach, I would take -- I would try to go and arrive at the airport two hours before my flight. One, to check and monitor things. Two, to ask questions. Three, to allow for the extra security across each step of the way.

There will be extra security just getting into the building in every airport. They'll be extra security checking in. There will be longer lines and probably a longer time to get through those metal detectors. And each plane has to be inspected before passengers get on it. And nobody really knows how long that's going to take either.

BROWN: And those questions that they routinely ask, did you pack your own bags, did anyone give you anything? Nobody's going to answer them as nonchalantly as they did a few days ago.

MILLER: Right.

BROWN: Mike, thanks. Mike Miller of "Aviation Daily" joining us -- Judy.

WOODRUFF: Aaron, those are the kinds of precautions that -- I know that people flying into and out of Israel have grown quite accustomed. They've become routine in that nation, which has seen terrorism become part of its life. We're going to be prepared to go back to Aaron at any moment, as we watch the 60-story building close to him, as it gets shakier and shakier, if you will, and may be on the verge of collapsing.

Right now, we want to show you President Bush visiting the Pentagon, just a short time ago. He went over across the Potomac River to pay a visit to employees there, to inspect the damage. And after he took a look, here's what he had to say.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Secretary and I are -- first of all, I must tell you -- I am overwhelmed by the devastation. I am so grateful for the people who are working here. We're here to say thanks to not only the workers on this site, but the workers who are doing the same work in New York City.

I want to say thanks to the folks who have given blood to the Red Cross. I want to say thanks for the hundreds and thousands of Americans who pray for the victims and their families.

Secretary Rumsfeld told me when I talked to him that he felt the last shake in the Pentagon. Even though he was in the other side of the building, the building rocked. And now I know why.

Coming here makes me sad, on the one hand. It also makes me angry. And we -- our country, will, however, not be cowed by terrorists, by people who don't share the same values we share, by people who are willing to destroy people's lives because we embrace freedom. Our nation mourns, but governments go on, actually we're functioning. We're on high alert for any possible activity. But coming here confirms what the secretary and I both know, that this is a great nation. And people here working hard prove it. People out here working their hearts out to answer families' questions, to remove the rubble and debris from this awful scene.

And I again thank everybody, not only in this site, but all across America responding so generously, and so kindly in their prayers, and their contributions of blood, and their willingness to help in any way they can.


WOODRUFF: President Bush visiting the Pentagon just a short time ago, where they have only begun to pick -- pull out the victims and to clean up the damage.

CNN was part of a poll that was conducted last evening in the aftermath of yesterday's terrible acts. And our senior political analyst Bill Schneider joins me now to tell us about the poll and what the American people are saying -- Bill.

WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: Well, Judy, people see this as far more than a crime or an isolated terrorist incident. That came through loud and clear in four different polls, one of them by us all taken last night. In our own poll, 86 percent of Americans described yesterday's attack as an act of war against the United States.

Now you remember President Bush warned last night we will make no distinction between the terrorists who committed the crimes and those who harbor them. And the public agrees with that. In "Washington Post"/"ABC News" poll. 84 percent supported military action against countries who assist or shelter terrorists.

There's also agree on one other point, we'll get him. In all four polls, the majority said they were very confident that the United States would be able to find and punish the people responsible. So not only do Americans believe we're at war, they're confident we'll win.

WOODRUFF: And Bill, when people were asked to what extent they view this as a turning point in American history?

SCHNEIDER: Well, you know, that's a startling and dramatic finding from a poll taken last night from Ipsos Reed. Three-quarters of the public said that they see these events as a turning point that will fundamentally change things forever. Only 21 percent believe that things will eventually in the country, return to normal.

To Americans, yesterday was like Pearl Harbor day and the day John F. Kennedy was shot. Everyone will remember for the rest of their lives exactly where they were and what they were doing when they heard the terrible news. And like the Kennedy assassination and Pearl Harbor, yesterday's events will change America forever -- Judy. WOODRUFF: All right, Bill Schneider.