The EPA is drawing a backlash from lawmakers and small business owners across the country over a new proposed regulation under the Clean Water Act. The new measure would clarify which bodies of water are within the jurisdiction of the federal government, including smaller bodies of water like streams, riverbanks and wetlands that flow into larger bodies of water.

Lawmakers, including House Democrats, expressed their concerns recently on Capitol Hill.

"This is ludicrous. I don't think anybody with a straight face can say that this is anything but a huge grab of jurisdictional power at the end of the day," said Rep. Kurt Schrader (D-OR), adding that "not every dang small businessman" has a lawyer on retainer to go and fight the regulations.

The Special Report All-Star panel - Judge Andrew Napolitano, Charles Krauthammer and Juan Williams - weighed in Thursday night. Napolitano said this issue touches on constitutional questions about private property rights, saying Congress has not given the EPA the authority to "regulate the tiniest bodies of water, even seasonal pools and puddles of water on private property."

"At some point, regulations become so burdensome, so onerous, it's the equivalent of the government taking the property or the equivalent of the government being physically present on the property. They will drive small businesses and small farmers out of business because these folks don't have the wherewithal to resist it," he said, adding that the regulation can only be stopped if both houses of Congress come together to defeat it.

Krauthammer called it "insane" for the federal government to assert the authority to regulate "water in a trench" on private land.

"This is yet another example of the inexorable, inevitable, eternal expansion of regulatory bodies," said Krauthammer.

Watch the full discussion above, and hear what the All-Star Panel has to say on the big issues in Washington, weeknights at 6:30p ET on Special Report.