• With: Joe Rago, James Freeman, Steve Moore, Mary Anastasia O'Grady, Matt Kaminski

    There are things with which we compete with France on and with Germany. Really, the worst thing about this, is that we created a political problem for Chancellor Merkel and the French by having this come out.

    GIGOT: Inside Germany.

    KAMINSKI: They actually don't -- I'm sure they knew this was going on, but once the Snowden documents came out, they had to deal with it politically at home.

    GIGOT: What should they do to handle that? How can we help them at home, Mary?

    O'GRADY: Well, I'd prefer the kind of -- sort of things that Senator Feinstein is suggesting, which really aren't major changes in the way the policy would work. I mean, the fact of the matter is everybody spies. The French intelligence -- former French head of intelligence came out last week and said, what are you talking about, everybody's been doing this. Helmut Schmidt said that when he was chancellor of Germany, he assumed he was being spied on. This has been going on since the Cold War.

    So basically yes, maybe we should provide some cosmetic cover in order to help, for example, Ms. Merkel regain some trust in the relationship with the U.S. Beyond that, I don't think we should do anything.

    GIGOT: Dianne Feinstein, being the chairman of the Senate Intelligence Committee, she's moving some legislation to put some -- she says -- a review of all of these things.

    There's also a report this week, Joe, that the NSA was spying, breaking into Google and Yahoo! networks overseas, not domestically, but overseas, and the companies themselves this week are up in arms about that.

    RAGO: They are. But you have to remember, these were taps overseas, purely foreign-to-foreign communications. When the Snowden documents started to company out --


    GIGOT: Snowden being the leaker.

    RAGO: Edward Snowden being the leaker. We were talking about domestic spying and snooping on Americans. Here you have purely foreign intelligence and, suddenly, that's a crime as well. It's kind of an indication of the moving goal post of this debate.

    KAMINSKI: There's a great danger here domestically of the political backlash. I think Feinstein's trying to ward it off. But there are some, Rand Paul --

    GIGOT: Against the NSA.

    KAMINSKI: Exactly -- Patrick Leahy. There's Sensenbrenner in the House. They're --


    KAMINSKI: -- pushing legislation to stop the NSA from data collection, to let the ACLU basically argue why certain things shouldn't be done, and to really handcuff our intelligence services the way that happened in the 1970s, which indirectly led up to our failures that led to 9/11.

    GIGOT: How big a danger is that, Mary?

    O'GRADY: Well, it's -- I think it's possible that, you know, you're going to get the momentum but it's incredibly naive. I mean, you know, as if -- if the U.S. stops doing this, then it won't be happening anymore. Basically, if the U.S. stops doing it, then the only ones doing it will be the Chinese --


    -- the Russians --


    -- you know, the Brazilians, the Cubans, and probably the Germans and the French. The idea that by banning the U.S. from doing it, you can somehow stop the spying worldwide is crazy.

    GIGOT: All right, Mary O'Grady, thank you.

    When we come back, our Election Day preview. From a pair of high- profile governors races to some controversial ballot measures, we'll tell you what's at stake in your state on Tuesday.


    GIGOT: Well, all political eyes are on the pair of governors races this Tuesday as voters in New Jersey and Virginia give us a glimpse of the political landscape heading into 2016. But ballot measures across the country are also generating their share of controversy, including a constitutional amendment to raise the minimum wage in the Garden State, and another in Colorado that would increase taxes by $950 million in one year and restructure the way that state funds its public schools.

    We're back with James Freeman and Steve Moore.

    So, Steve, let's go to Colorado first. It's a very interesting state, trending left politically, with a kind of new coalition of cultural liberals and Hispanics and women, leading to a Democratic majority there. And they could take another big step to the left with this ballot initiative. Explain.

    MOORE: No question about it. Paul, you're exactly right. Colorado is one of those states that have moved more to the left than just about any other state in the country. Partially, because of huge Democratic money and liberal money that's gone into that state.

    So what they've now put on the ballot is a gigantic income tax increase to pay for more money for schools. This is a big power play on the left to expand the size of the state government. The income tax, if it's raised, Paul, would get rid of a traditional policy of a low, flat tax. I would make the case, one of the reasons Colorado has been a high- growth state over the last 30 years is precisely because they've had a very, you know, sound economic --


    MOORE: That's in jeopardy now.

    GIGOT: The flat tax is 4.6 percent or so, on all income levels. But if this passes, it would move up to 5 percent for certain taxpayers, and then 5.9 percent, I think it is, for people above $75,000 a year. But then what's happened in the states --


    GIGOT: -- that get rid of the flat tax, it makes it easier to raise taxes again and again.

    MOORE: Right. Just ask people in Illinois or ask people in states like New Jersey and New York. You're exactly right. It won't be long before that rate goes up to 8, 9 or 10 percent, in my opinion, if they pass this resolution.

    I don't think it's going to pass, Paul. I think the people will vote it down.

    GIGOT: All right.