• With: Joe Rago, Kim Strassel, James Freeman, Allysia Finley

    STRASSEL: At the moment -- Koskinen talked in front of this committee hearing this week. He did not give any assurances he was going to withdraw it? But there's going to be enormous pressure on the IRS to do so because, in effect, what these regulations do is formalize the targeting that came out last year. And it will silence, for the most part, the White House's political opponents that work in the 501(c)4 area. It is causing enormous outrage.

    What also caused some outrage this week, too, is that House Ways and Means chairman, Dave Camp, pointed out that because the White House is claiming that these regulations were the result of the confusion, they put these regulations to clear up the confusion. Given that we now know, in fact, they were being worked on years ago, that appears to be a falsehood, the argument for why these regulations were created.

    GIGOT: Joe, what do you think about the politics of this? Good issue for Republicans going ahead? It's clear the administration doesn't want to concede any ground on this.

    (CROSSTALK)

    RAGO: No. They are even rubbing salt in the wound by restoring IRS performance bonuses this week just to sort of --

    (LAUGHTER)

    GIGOT: Make everybody feel better about the quality and efficiency of the federal government.

    (LAUGHTER)

    RAGO: I think the White House is undermining its own agenda in other areas by refusing to demand accountability here. You saw this week on immigration, for example, the House Republicans basically bowed out because they can't trust the president to enforce the law. I think that is really corrosive to relations on Capitol Hill.

    GIGOT: Not doing anything, not holding anybody accountable for the IRS problems also hurts the president's credibility when it comes to the National Security Agency because people say, hey, can't trust the IRS, why should we trust people with the power of surveillance? That's a big

    problem for trust in government.

    Still ahead, this week, the House passed legislation to help ease a worsening drought in California. But the White House threatens a veto, and Governor Jerry Brown says Congress should stay out. The latest battle brewing in the Golden State when we come back.

    (COMMERCIAL BREAK)

    GIGOT: California is suffering one of the worst droughts ever. In fact, coming off its driest year on record, it threatens to inflict the worst water crisis in state history. So this week, the House passed GOP- backed legislation billed as a response. But the measure now faces a possible White House veto and opposition from Senate Democrats who claim the bill is nothing more than a political ploy to get votes.

    With more, we are joined by Wall Street Journal editorial page writer, Allysia Finley.

    Drought is one thing we can't blame on politicians, much as we might like. But you are arguing that the effects of this drought are worse than they need to be on the state. Why?

    ALLYSIA FINLEY, EDITORIAL PAGE WRITER: That's right. For the last 10 years, basically, the government, federal government and state government to an extent have imposed these water restrictions, pumping restrictions at the San Joaquin/Sacramento Red River Valley. That has restricted water going south of the delta to the farmers in central valley.

    GIGOT: So they haven't gotten their full allotment -- the farmers -- of water that they should, that they'd been guaranteed under previous agreements since 2006.

    (CROSSTALK)

    GIGOT: Where is that water going?

    FINLEY: It's going out into the bay in many cases. It's just being flushed out into the ocean, or to wildlife protections like the salmon or delta smelt, wildlife refugees.

    GIGOT: Even when there is no drought, they've been taking the water, and instead of storing it somewhere for a dry day, they've been pushing it into the bay?

    FINLEY: That's the big problem is they haven't been storing it. Even in the wet years, like 2010, 2011, which tended to be -- you had heavier precipitation, they do not have it stocked up now.

    GIGOT: What is the delta smelt have to do with this? Delta smelt -- I grew up -- I like freshwater smelt. Good eating.

    (LAUGHTER)

    But what is it about the delta smelt, why is this complicating matters?

    FINLEY: OK, Yes. It's a free-range fish. This may sound ridiculous but it's threatened under Endangered Species Act.

    GIGOT: OK.

    FINLEY: That means you cannot take it or harass it or -- there are a bunch of various restrictions. So basically, these smelt have a tendency to swim into the pumps at the delta, which causes them to -- they get captured. And this is illegal under the law.

    GIGOT: So they get priority in terms of water allocation to try to make sure the delta smelt are surviving and prospering? And they get priority over farmers in the central valley? I don't want to oversimplify this, but am I being fair?

    FINLEY: I mean, that's how ridiculous it is. The delta smelt do have priority. 300 delta smelts were caught in the traps like a year ago and so, as a result, they flushed 8,000 acre-feet of water into the ocean.

    (LAUGHTER)

    FREEMAN: Well, I'm glad somebody is standing up for the smelt. It is an adorable little critter. But whether it is in danger is a question. It is a question of how much -- where do you draw the line? How much are you going to pay for species versus people?

    GIGOT: Right.

    FREEMAN: Even within the category of people, who pays the bill if you really want to do an extra million board-feed a year for smelt and other critters? This is why the Democrats especially want no coverage of this issue at all. Because it raises very difficult questions that they would prefer not to answer, especially in a difficult economy where people are naturally thinking more about jobs.

    GIGOT: Especially the balance between environmental regulation and the well-being of people and jobs.

    What would the House bill do?

    FINLEY: Basically, the House bill would allow -- would give farmers priorities over the fish once it starts raining. Right now, the environmentalists are saying, once it starts raining, we want the water to go to the fish and the wildlife protections that right now nobody is getting. We want fish to get the first priority. The House bill would give farmers the first priority.

    GIGOT: One Democrat, Jim Costa, in the central valley, voted for the Republican bill. But two others, Jeremy McNerny and Bob Garamendi, did not. Could this be political trouble? Short answer.

    FINLEY: Yes.