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Welcome to Big Digital Energy with Chuck Yates, Mark Meyer and Kirk Coburn. Weekly news in energy covering oil and gas and cleantech.
0:00 Hey, digital wildcatters. Are though, I think technically we should be saying, hey, colliders. I've been catching myself. I think I said collide on the power hour this week. Did you? Oh,
0:12 that's good. Good. Yeah. I'm using my collide. I'm consciously using my collide email address. And for the sake of the audience, so that they don't think this is the Donald Trump renaming the
0:29 Gulf of Mexico, the Gulf of America. Every technology company usually changes its name to its product, you know, as a Facebook, became Facebook, etc. So anyway, collide is our enterprise AI
0:48 software solution, as well as our public facing knowledge share app that everyone should apply to be a member on. And so I think the name digital wildcatters is going to go away.
1:00 so we are collide. Will it make it through the entirety of 2025? That's a good question. I'm also not sure that this is the public announcement we needed to actually do this, but it's a real thing.
1:13 So we're collide. Well, you've mentioned collision. You've mentioned it
1:18 before. I think a couple of shows ago, maybe three. Yeah, there you go. All right, Mark, so what part of the world are you in? I'm in Arizona.
1:30 Well, since the end of April, I've been in Austin, Memphis, Jackson, St. Louis, back to Memphis, Jackson, or excuse me, Houston, Charlotte, and then got back here to Arizona a couple of
1:46 days ago. A Johnny Cash song, I've been everywhere, man. My connection was in Nashville, and I hadn't been in that airport in a while, It was chaotic, frenetic, and they spent a bunch of money
2:03 on the inside of that airport and CCON course where there used to be one little crappy cantina in a new stand. There's now every Broadway branded outlet. So it was also the day before the start of
2:18 CMA Fest. So that explains a lot to you. But there are a lot of people, there are a lot of people flying, regardless of where you are. Good for oil demand. Well, it was really cool. You sent
2:31 run a show around and you sent Reagan's D-Day speech. I think I intend to do that. I post that somewhere every year. It's certainly my favorite of my lifetime presidential speeches. It was a
2:47 speech he gave on site on the 40th anniversary back in 1984. I think it is as presidential and up lifting as a speech can be not. something we've seen a lot of here in the past, oh, I don't know,
3:03 20 or 30 years.
3:06 So it's an important day last year was obviously a bigger headline deal because of the 80th anniversary, but I think it's something that everyone needs to take a pause and remind themselves of what
3:19 that day was about and what it ultimately meant. There's some good interest stories around that One I read last year, again, was the Bedford Boys by Alex Kershaw, who has written some incredible
3:36 pieces on World War II. So just wanted to recognize that it is June 6. It is the 81st anniversary of the largest seaborn invasion
3:48 in history. And it's just an incredible moment in the country in the world's history And I think the speech really is. It's always a nice reminder to me.
4:01 Reagan did a great job with that speech and there were clearly many more DDA veterans who were able to attend that one. I saw some clips of the gathering from today and it's just the reality of time
4:16 moving on and we don't have a lot of those veterans left anymore. So anyway. Yeah You know, I took the girls, I think three years ago, over to Paris for spring break and we spent a day in
4:33 Normandy and was really, and I wound up doing a podcast. I literally shot the whole thing on my iPhone. A Texan looks at Paris. But one of the points I made in that podcast that really struck home
4:47 for me is you're out there at the DDA museum, out on the,
4:54 out at Normandy, out at the beach. And the one thing that happened is they were sending three waves of people in. The privates were hitting first, gonna take the beach, then call it the corporals,
5:07 we're gonna come in next, set up camp, and then the generals were supposed to hit. And literally to a man, all the American generals were screw you, we're going with the privates, including
5:20 Teddy Roosevelt Jr, who was walking with a cane And what happened is there was some bad weather that day, a few of the ships got blown further east, then they were supposed to be, and the fact
5:34 that generals were on those ships to make decisions probably turned the tide of the D-Day invasion. And it's a great testament to our fighting men that generals would go with the first wave Yeah,
5:52 and Roosevelt Junior, I think, is buried there, moved his brother who was killed in an action in World War I. I believe over Belgium. He was a fighter pilot and
6:09 I think he's interred there with his brother. So Ted Senior knew no shortage of loss in
6:16 his life. And the Roosevelt story of general being in the front lines or in the first wave is probably the most famous one but
6:26 just kind of shows you what what kind of resolve there was that day. The Bedford Boys story is particularly harrowing just given the the amount of losses they were exposed to and suffered in the
6:38 first wave. So it's that's a very worthwhile read. Alex Kershaw is the author of that book and many others.
6:49 The another another while we're on it touching moment I had while in Normandy was a red Eisenhower's letter that he had written if it had been a failure. And he said, Something to the effect of, if
7:10 we're successful, the credit is due to all the men, if we failed, failure is mine alone. Yeah. If he was taking full credit for the loss of, if that happened. So,
7:24 anyway, very, very powerful stuff Every American should go to that cemetery. It's
7:35 very powerful.
7:39 Yep. Anyway, so, anything
7:44 going on politically this week?
7:47 I think JD Vance was going on a podcast and he's like, I don't know what we're gonna talk about.
7:54 Not only a podcast, it was apparently Theo Vaughn's podcast. Yeah. I haven't heard it yet. It should be very interesting. Yeah, it should be to get his take. We were sitting,
8:10 we kind of did a cool thing around collide here. We took a leadership, I
8:17 don't know how to best describe it, maybe seminar, where we took a strengths test, where it measures your strengths, your weaknesses, and then we charted kind of all of the management team
8:37 around here, and where we sorted out. And the point of this exercise is to really figure out what your weaknesses are, so that as you start hiring and growing, you solve for that The lady who put
8:49 on the seminar for us said,
8:53 In all her years of doing this testing, she has never seen a startup with so many people that are strong in influencing.
9:06 And she did say it makes sense. Y'all used to be a media company. So it makes a lot of sense that you've got a lot of people that like to have a camera on and talk. But anyway, so we were in the
9:18 middle of that and we kind of took our five minute bathroom break and pulled up Twitter and we're just like, holy cow, musk and Trump are going to war. This is crazy.
9:28 Yeah, I'd be curious to know and maybe you don't want to say what were the most identifiable weaknesses.
9:36 Somebody scored low on empathy.
9:41 Yeah, I actually learned some stuff about myself. I don't think it's any surprise that I showed high marks influencing. I showed high marks and empathy.
9:58 But one of the things I don't think I appreciated about myself is
10:03 my love language is service, right? So I show you I love you by doing things for you, etc. And one of the things that came out of it was when you're really empathetic, you wind up suffering with
10:18 your friend, your spouse, whoever, else. And your love language is service. And so you're, you know, somebody has something, you know, a friend has something happening, you do a lot for a
10:30 friend and all. But you kind of you as an empath, an empathetic person goes through that too. I go through it too. But no one thinks to give me a, you know, give me something for for having gone
10:46 through it. And I know that kind of sounds silly and goofy. But I don't know if I appreciated it, but I can certainly see that in myself, getting frustrated with people, you know? So anyway, I
10:59 thought it was a really good exercise. But needless to say, the five minute bathroom break, it sounds like Musk and President Trump have broken up.
11:12 Apparently there was supposed
11:18 to be a private discussion, follow up today, Elon had cooled off a little bit One of the threads that I saw and we've attached it, or we will attach it here, was by Devin Erickson, who's
11:27 apparently a sci-fi writer, creator. And he broke it down into their two different personality types. And it's pretty fascinating.
11:40 It's the first time, and it's mentioned many times in the thread, and he kept describing Elon as a sperg Witches. short for his alleged Asperger's. And they want 100 of the information. They want
11:58 full transparency. They want the truth when the plans overstated sense of right and wrong. Right. A lot of one zero and absolute right and wrong. And I don't think Elon was anything but
12:14 transparent in his messaging since his involvement. And even before his, I guess before his rogue appearance, he's been talking consistently about the debt death spiral. Right. And because this
12:29 big, one big beautiful bill is pretty anemic with, I heard what what 15 or 16 trillion in quote unquote savings over a 10 year period. You know, we're going to continue without any kind of
12:48 reconciliation, which is always part of the legislative process, we're going to continue to run significant deficits and add trillions over
12:60 a fairly short period of time in conjunction with raising the debt ceiling by another5 trillion. And so one of the things that's explained here is that Trump is the opposite, operates and I don't
13:14 know if Machiavellian is the right description, but it was the one that was used. They see
13:22 withholding of information in that calculus and not fully explaining the plan as their deal making advantage and then it escalates into the type of outburst, I think that
13:40 Elon has shown he is certainly prone to make, some of it got pretty nasty. It's just an interesting profile. One of the things that in the context of some of the back and forth yesterday was
13:57 speculation by the talking heads and some others that he's
14:03 really agitated about the repeal of all the EV incentives and the mandates. And he did comment on that, take them all out, leave oil and gas, I don't care, but it's unfair And so there have been
14:18 some tangential discussions on,
14:22 I don't know, how do you think about it when oil and gas, things like perpetual
14:29 IDC deductions or characterizes subsidies?
14:34 I mean, I think, you know, if we're getting really technical, it's not a subsidy. I mean, it's accelerated depreciation and other businesses have that in certain instances to
14:50 to say that we haven't done some favorable tax treatment to benefit oil and gas because we've looked at oil as strategic we have. And we've had a lot of Texans as head of the Ways and Means Committee.
15:04 Bill Archer was a long time congressman from Houston that was in charge of it. So
15:11 I think like with most things, technically he's not right when he says that, but directionally he's right. There's some favorable stuff, oil and gas benefits from. That being said, I was gonna
15:26 just say, you know, that being said, price oil and gasoline today is the same as it was 20 years ago without regard to inflation. It's on a relative basis. It's cheaper today than it's ever been.
15:41 Yeah, and I remember back when I did my first initiation report, I did a kind of a structural comparison with some other industry analogs where there's significant amount of risk taking. And one of
15:54 the comparative industries is pharmaceuticals. And up until 2017, 100 of
16:01 RD expenditures for a pharmaceutical company were fully deductible in the year that they were incurred.
16:16 Which is a huge incentive to expand or move out farther on the risk curve for exploration and discovery. So there's a lot of similarities there. But
16:24 I don't know, it's,
16:27 you know,
16:29 I think Trump's got a very short memory. He doesn't hold political grudges
16:37 to his advantage. You know, there was a lot of noise around the VP selection process about, you know, apparently at some point called him Hitler, et cetera, et cetera. Now he's a sitting vice
16:52 president. So, and then there were other threads out there suggesting that this was all
16:59 pre-planned.
17:02 Yeah, the one thing I found very interesting was the whole Epstein thing. They haven't released the Epstein files because Trump's in it. And, you know, I'm no huge Trump fan, but I kind of look
17:17 at it the same as I do the Russian collusion thing. If they had the goods, we would have seen it. I mean. Oh, we'd have three elections. Yeah, totally. I mean, the Biden
17:31 FBI, the Obama FBI totally would have released those videotapes way earlier or. I mean, supposedly Trump is on the flight logs. He took the plane, but. I don't think they have him taking the
17:47 plane to the island, you know? Yeah. And he kicked him out of his circle, what, back in 2005, 2006? Yeah. Marlach. Something like that. Yeah. Yes. Supposedly, Trump had kind of gotten
18:01 word that he had been aggressive towards some of the staff and was kind of told, You're not welcome here again. So. I was a little surprised I was a little surprised you didn't make a TMZ
18:13 appearance and comment on all this yesterday. You know what's wild is they haven't asked me back in like a year and a half. So I don't know. I was on there six times and I guess I messed up the
18:25 last time because they haven't had me back. Yesterday would have been perfect. TMZ, I'm available any time you want. I tried this pretty far outside of the realm of energy, although there was
18:38 some attempt to to find a linkage there.
18:43 Yeah, I'm not sure. I'm not sure there really is a a linkage, but I mean, again, it's like just the reality show that we live in. Yeah, exactly.
18:57 The, all right, what's next on our list? I'm pulling up the running show. What else do we have? Oh, yeah. Tell me about the sir or caught thing. Senate bill six, which is according to this
19:10 analysis that I pulled up on LinkedIn that will attach is eminent pass. And basically, it shifts 75
19:22 megawatt or greater loads and think about that in the shape of hyperscalers and all of this projected data center and AI demand that's supposed to be hitting or caught and is hitting our caught. But
19:37 basically gives our caught a kill switch in times of particularly what's designated in ERCOT EEA-3, of which we've only had three of those events in the last 20 years, the most recent of which also
19:55 had the longest duration, which was during Yuri. And basically what ERCOT's got to do because of
20:08 the spike in demand in one of those events where the reserve margin threatens to go below what's required for operation of the grid in an emergency, they have to rotate blackouts around the grid.
20:24 And so their transmission upgrade issues related to that. And heretofore those large firm loads were essentially not, I wouldn't say they wouldn't be in a crisis untouchable. But ERCOT did not have
20:39 control to use. something that's akin to a kill switch. So now
20:46 developers and hyperscalers are going to be looking at a grid, which is obviously confined to Texas, where the
20:58 grid operator and the regulator have the authority to control in those extreme events So it shifts some of the reliability burden onto the developers and the operators on the data center side. The
21:14 other large loads that were previously firm, or at least prior to this, assuming it gets passed and enacted. All the other relevant grids that are multi-state, regional grids do not have this. So
21:28 its point is, what does this do to
21:34 the whole commercial and economic side of the build out and the attractiveness of citing these facilities, and Texas won
21:45 it because it takes that transmission upgrade burden to some degree off of, off of ERCOT because you can, you have larger chunkier loads that you can point to that
22:01 affect a much smaller portion of the transmission system by shutting down that, that large flexible load in an emergency situation.
22:15 But it shortens the permitting, there's various steps of, of permitting and various phases of permitting that are outlined in a table. In the piece, it, you know, it's potentially going to
22:27 shorten those things And it's also going to
22:33 certainly motivate developers to look at
22:38 power islands in the form of backup generation. and how much do you design for? What are you willing to accept based upon the criticality of your operation from a data center perspective? What can
22:50 you tolerate? And so it's a complicated issue. It sounds like
23:02 more regulatory and government control. But it actually, this piece argues that it's likely going to make
23:12 Texas and ERCOT a bit more attractive because you do have that aspect of potentially accelerating permit timelines or compressing permitting timelines, which for some of these studies that are very
23:27 reliability oriented can take multiple years. I don't know exactly what the before and after looks like, but it's basically getting kind of a. a messy situation from a transmission upgrade
23:44 standpoint where you have to distribute load sheds or rolling blackouts across a bunch more areas, wider areas, a lot of it affects residential. So we now have this kill switch option in this
23:58 legislation that if passed is going to make the problem a bit easier to deal with. And again, one of these level three emergencies occurs about once every six to seven years. Well, and I think the
24:15 other thing that, so you're basically sitting there. When you step back, Urkkot has always been, you know, you build it, but we can shut you off whenever we want versus other grids that are like,
24:29 let's do a, you know, feasibility study. Where do we need power demand?
24:36 And so that's been one of the big,
24:39 benefits or selling points of the ERCOT system is free market, put a lot of power demand on there. The way we handle the overload is we can just shut you off whenever we want.
24:54 Folks got around that by in effect saying, Okay, but we just want a firm contract. Now in effect, ERCOT's pushing back and saying, You can have your firm power. You just have to pay for it.
25:05 That means backup diesel gen sets and batteries or however they do, reliability, storage when things get cut off these days. You're just going to have to pay for it yourself if you want the
25:19 reliability. As long as you have the land and the gas supply in the case of gas fired backup or diesel storage, then I think based on just anecdotally what we've seen in using the most high profile
25:35 anecdote, which is the Grocker XAI facility in Memphis, they're not waiting on the grid to power that thing. So they moved in 35 guest turbines. And so if a hyperscaler has to add that surety of
25:54 backup, but they can get to their
25:59 kind of ambient power load connection to the grid faster, that's really what's at play here is I need, every one of these guys needs power yesterday. But if you're going to give me a quicker time
26:13 in the queue, I think there's 187
26:18 or 137 gigawatts of power in ERCOT's permitting queue right now. And only six have gotten
26:30 energization. I've never seen that word before approval. This is going to help work off some of that backlog Theoretically. The point is that there's, you know, that's a multiple of Urquat's
26:42 daily capacity at this point,
26:45 it's almost two acts.
26:48 The total grid generation capacity right now. But one of the things in thinking about this, and I took it by myself a couple of weeks ago, I'm about halfway back through it, was to read Meredith
27:02 Anglin shorting the grid And what
27:05 really the crux of the issue is, when you have these multi-state RTOs and
27:12 ISOs, is that you have this constant fight over very costly transmission upgrades, which are absolutely necessary,
27:26 particularly in emergency situations And
27:31 under FERC 1000, these multi-state jurisdictions, state jurisdictions. pay for their transmission cost burden is based upon their own state's consumption or usage. Well, there was a case in
27:48 shorting the grid where Massachusetts can decide that it wants more green power and wants to build more transition or they want more hydro imported down from Canada. Well, that transmission line has
28:00 got to cross New Hampshire and Vermont that are subject to the whims of Massachusetts state policy decisions and under FERC 1000, if that transmission line gets built, then they're obligated to pay
28:15 those proportionate share of the transmission costs, regardless of whether that transmission benefits them or not on an individual state basis. And so I think it's a worthwhile thing to read the
28:27 books, what, three, four or five years old. I hope she's coming up with a sequel called shorting ERCOT. But it's it is really It is really a fine example of translating and using a lot of common
28:45 sense interpretation of things that are just both horrendously and unnecessarily complex in all facets of grid operation and grid policy. Well, and
28:57 the one other thing to point out, just highlighting something that I bet we talk a lot about over the next five years, is you start putting price on power and the quality of power, ie. in this
29:12 case reliability, we're going to have to put in backup. The ultimate builder, designer, and user of the data center is going to respond to those price signals, and so I think what you're going to
29:25 see are data centers that don't really need reliability, they'll have a switch that, you know, gives you 30 seconds of power just and power down safely. And that may be stuff like training big,
29:41 huge foundational language models. 'Cause if that shuts down to 12 hours, who really cares? Versus data centers for emergency rooms or critical care at hospitals. Those type
29:60 sensitive needs.
30:04 And
30:08 so I think we're gonna start seeing bifurcations of data
30:12 rooms based on that kind of costing. Yeah, there is a pretty broad continuum and sloping continuum of flexibility in terms of tolerance for power outages or power reductions. So. Yeah, meme
30:26 generators can just power down. We don't need those. Again, Meredith, please write a sequel called shorting our cut with all merit. Please come on BDE. Absolutely. I think I went back and forth
30:40 with her on Twitter and tried to get her to come on the podcast, but anyway. So what's my buddy Chris Marks up to? I saw this on the run of show. I don't think I've read this tweet when it came
30:51 out. And the only reason I flagged it, we talked about Nuke's, a show or two ago, and that was, I think, in relation to the Denver piece that was out a couple of weeks ago. And I had seen this
31:08 graph that Chris put in his tweet talking about nuclear, and it's a graph from some time ago, but I couldn't ever find it. And fortunately, he decided to talk about it a few days ago. So I
31:24 thought I'd bring it up and it basically shows for all the players from
31:32 1950 to really, It's the relevant. of what the graph shows is through 2010, what has happened with the cost of nuclear construction on a unit basis cost per megawatt. And it's color-coded with a
31:52 bunch of scatter dots. And if you look at what happened to the US and really reinforcing the point that we were talking about before, which is, you know, almost right out of the gate, the US
32:06 became very obstructionist
32:09 primarily on using the vehicle, the NRC. And not surprisingly, cost have gone almost vertical or did go almost vertical. And basically, you see no meaningful US new construction data points
32:27 passed, call it 1980. There may be one or two. And I think that I think that confirms the point. that was made in the piece last week, which is we've done nothing meaningful on a greenfield basis
32:42 for the better part of 45 years in terms of grid scale nuclear. While, you know, France is often noted as a best-in-class example, India is another one where, you know, their cost line has been
33:00 surprisingly flat toward the lowest end of the curve, so it can be done. And when I think about France, they've been able to do it in a much more,
33:13 or a much less free market and much more, I think we could argue, regulated
33:19 collection of societies in governmental philosophies. Sensitive, if you will, yeah. Sensitive, exactly. And so, from a practical standpoint, it can be done And it was just something that I'm
33:32 glad that Chris. noted he's been, he's been showing up post his graduation talking about a number of things. I think he was on Newsmax the other night. Yeah, he's, he's great. He's gonna, I
33:45 think he's coming to Houston in January for something. And so hopefully we'll get him into the studio. You know, one thing I will, I will say that we've kind of talked a lot about on BDE is, look,
33:59 Trump's gonna want his low oil prices, but go ask for stuff because he's willing to do anything else. And I think this would be a great ask from the energy business is put together, you know, like
34:15 three basic plans for nuke stuff and get a bill passed through that just says, you know, if you build according to this plan, then you know, permitting 90 days or whatever. I mean, I don't know
34:29 how to write the legislation because I'm not a nuke guy, but I think there are things the energy business could ask for, even if you didn't plan to build nukes tomorrow, at least you got it in your
34:41 hip pocket. 'Cause there is, when I was talking to Anne Bradbury,
34:49 she said there is some bipartisan demand
34:58 to potentially do some things about permitting and transmission lines. And so there may even be a big beautiful bill, if you will, on that front. And this would be one of the things I'd ask for is,
35:08 give me some freedom to build some nukes here without quadrupling the cost. I can't keep up with all the executive orders and what's been signed, what's been blocked, what's been executed upon.
35:20 But one of them was to authorize the DoD under whatever defense use authorization to actually cite nuclear power facilities on DoD land.
35:35 and that gets around I think some of the inertia that clearly has affected the build out over the last or most of the 50 plus year history of nuclear power in the US. The other thing I was thinking
35:50 about and I haven't seen this doesn't mean it doesn't exist is in this whole conversation around the cost competitiveness you look at US nuclear you know should be somewhere between 1 to 2 million per
36:04 megawatt
36:06 you know that that vertical scatter is approaching 10 to 11 million and that is you know just a lot of of inefficiency in the system along with delays cost overruns etc
36:25 but I have yet to see an easy to
36:33 understand normalized comparison for generation sources that are adjusted for their capacity factors. Nuclear runs about 93 plus. Combined cycle gas is 60-ish, maybe low
36:48 60s. Simple cycle is in the low 40s. When does 30 to 40 solar is kind of in that same or a magnitude. So something as simple as taking each one of these comparative generation sources and then
37:07 dividing their costs by their capacity factor. I don't know if that's a reasonable way to look at it, but if it's not on or it's not capable of being on, is it the cost higher because you've got to
37:22 have some form of ultimately more costly backup. And in the case of Texas that backup has always been simple cycle or peaker gas.
37:35 which is certainly much less thermally efficient than or energy conversion efficient than combined cycle, for example, but nuke with a
37:47 93 uptime at a million to two million a megawatt and maybe a little bit higher than that, but it seems like the the undistorted cost as evidenced by France and India to be somewhere in that two
37:58 million a megawatt range. But I'd like to see kind of the replacement cost analysis adjusted for the reality of capacity factors. That's all I'm saying. I'd also like to see, 'cause I haven't seen
38:11 this either is, and they'd probably have to weigh dummy it down for me and it probably wouldn't even help given how much dummy and down they'd have to do. But I'd just love to see, back when we
38:24 built one of these things in the '60s or the '70s,
38:29 here's kind of what we had to go through Here's why it costs 10 times more today. price of these raw materials, the design and the backup, whatever we have to do for protection cost this I'd love
38:45 to see some of that because it's you know we always hear it and you see kind of proof in the pudding like when you look at housing in California versus Texas You know you get dollar per square foot
38:59 and everybody's buying the same wood, you know that that sort of stuff so you can at least back into kind of what permitting and regulatory environment does but I'd like to, I'd like to see it Kind
39:13 of in black and white be able to get my head around it. Yeah, it's.
39:20 You know he's only got three and a half years left and who knows what happens in November of twenty six but you know we know the nuclear timeline is measured in multiple years if not decades.
39:34 in a perfect condition. Yeah, and having for a big Congress actually have to spend some time in DC and work on legislation and actually get it passed. Yeah, and that's back to our second topic,
39:49 which was this whole dust up of Elon's very focused on the
39:55 existential threat of the death spiral. Trump's got a political reality that he's got to deal with I think one of the things in that thread that was compelling was Doge basically gave him a political
40:09 asset to go get some of his other wins, a number on the scoreboard of cost savings
40:18 that in reality and from practical political standpoint is going to take several iterations in a number of years outside of a balanced budget amendment and the, The other kind of procedural reality
40:34 is a lot of the meaningful stuff, as I understand it, would require a 60 vote
40:42 approval in the Senate, which you're not going to find nine opposition party candidates or senators to vote. Yeah, outside of Federman, I don't think there's a shot with the Democrat.
40:56 There was an interesting call. Thune came out and asked President Trump to have Rand Paul over to White House and have a discussion because Rand Paul's whole thing is voting to keep the tax cuts in
41:14 place. Yes, we absolutely ought to do that. I understand this is a reconciliation bill and we can only deal with mandatory spending. Could we cut more? Yeah, but I can even kind of live with
41:27 that. Rand Paul's. position as an educated person of how reconciliation works, is I don't wanna raise the debt ceiling, five trillion or whatever it's doing. I want that threat held over our head.
41:46 And I think if Musk thought about it, that's where he should be too, is that's the big problem with this bill
41:57 It might be interesting to see if this breaks it up to where literally we, 'cause there was a lot of talk at two bills at time
42:12 zero, where literally it was tax, what's our tax rates next year, boom, make the Trump tax cuts permanent, add no tax on tips, no tax on social security, nothing on overtime, and then see if
42:23 they come after
42:26 spending But tip tips and end. Tips and overtime, I just noticed in a glance at some details, do have a sunset provision in either '28 or '29, December 31st of '28
42:41 and '29. So this stuff isn't quote-unquote permanent. I didn't happen to see on Social Security. One little bit I saw this morning that I found interesting, it was a piece on the news about
42:55 raising the exemption on estate taxes in the case of farms and ranches. And there was a tax analyst, an independent tax analyst, policy analyst who was talking about that would, that's not trivial,
43:12 that would cost200
43:15 billion, which in
43:19 the deficit reduction chunks that we're looking for, 200 billion isn't a lot, but it's not nothing. You know, we're dealing with trillions here, But so. They're saying we're getting that kind of
43:33 revenue off of farms and ranches under the estate. I didn't see the base data. I didn't see the assumptions behind that estimate of200 billion, but that sounds like a lot. It could be on a lot of
43:52 times what happens with a state-type planning is. You may not get
44:03 the tax from the ranch, but a year out before the old guy dies, he sells the ranch, and in effect pays cash when he dies on his estate.
44:18 That could be real. At the end of the day, I think what's going to have to happen is we're just going to have to means test benefits. We're going to have to means test those security, medicare,
44:30 and medicaid, in effect, and you're going to have to pitch it as taxing the rich to get the Democrats to do it, too, if Trump's on the side of it. I think the way that I characterize all that
44:39 went down over the last
44:45 24 hours is, you know, where Elon's outburst and ire should be targeted is Congress Because Congress has done zero
45:03 in the realm of responsible things, because you have to your election cycle in the House, you have senators for life, and you've got third rail political issues like entitlement spending, where
45:23 that's where the only real progress towards deficit reduction without some other. statutory mechanism can be made. And nobody has the spine to touch it politically because that's self-preservation.
45:39 Yeah, I could have been, I mean, I'm probably, I don't know how I would vote,
45:48 how I would vote if I had to. Thank God, I'm not in Congress. But
45:55 last year, or this fiscal year, we're gonna spend seven trillion dollars. The big beautiful bill says next year we're gonna spend 73 trillion. Had we somehow gotten that 73 trillion to six and a
46:11 half trillion? I, we're gonna cut 500 billion out of spending. You feel like you could kind of squeeze your nose and stomach your way through that of, okay, we didn't get there all at once, So
46:26 we're at least heading in the right direction. I think if we keep the tax bill in place, we'll see some more growth. So instead of five trillion of tax revenue, maybe we do 530 or something, 54.
46:43 You go, okay, well, we can eventually get there, but to show spending growth just to me seems tone deaf. Yeah, and what was defense on that? I think it was 120 billion of the growth Yeah, it's
46:58 125 billion. Yeah, we basically are going from call it 850 to a trillion, something like that. Yeah. Anyway. Well, Mark, when are we getting you back in the studio? A couple of weeks. A
47:13 couple of weeks. I've got a pretty interesting power hour coming up. We're going to do live in the studio, so I'm looking forward to that. And I'm also looking forward. It's coming on, what's it
47:23 about? I don't think we've said yet So it is going to be dealing with power. So hopefully mostly me listening and not talking, but yeah, it's, it's what I'm excited to do. And then I'm also
47:39 excited by the prospect of stopping by Joseph's. Hey, yeah. For my morning coffee. And say hi to Vlad. And hopefully the Congressman is there. And hopefully Congressman Nells will be there. All
47:54 right, Mark, good to see you. Hey, guys, if you like the show, share it with a friend, leave us comments, love to hear what you guys are thinking, and we'll talk to you soon.