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) -- Jim Cramer visited Washington Tuesday, but it wasn't for any vacation. He was there to talk with members of both parties in Congress about resolving the fiscal cliff.

The good news, or what little there is, is that Washington didn't seem okay with taking a vacation if a fiscal cliff isn't done, Cramer said, reminding viewers of his "No vacation without legislation" war cry.

However, "it didn't seem like Washington was willing to rise above politics and take the necessary action," Cramer said. "I hope I'm wrong."

CEOs are so much better to deal with than congressmen, he added. "I'm not feeling confident our leaders will be able to rise above" partisan politics and come up with a deal.

So the bottom line for investors, Cramer says: "I think we're going over the cliff, then we'll bounce back."

Investors, you have to ask yourself "can you handle the endless Washington intrusion in your portfolio? If you can't, no one will blame you for selling. It really is that bad down there," Cramer said.

North Dakota Pride

If there's one state Cramer loves because of the energy potential of the Bakken shale region, it's North Dakota. So Cramer talked to the Sen. John Hoeven, about whether than can be a deal that promotes small-business growth.

Hoeven, an advocate of finding bipartisan consensus, is an unusual Republican in that he did not sign a no-tax pledge.

"I think we can get a deal on the order of $4 trillion over 10 years" through a combination of tax reform and entitlement reform, Hoeven said. "That's what we need to get our economy going."

As governor of North Dakota, Hoeven was behind a tax code that is "fair and makes sense." He said the state's economic growth and budget surplus comes from economic growth and not from taxes.

The U.S. tax codes must be reformed in a pro-growth way, Hoeven said. We need to unleash entrepreneurial energy, "the small entrepreneurs are going to make a difference."

Cramer said of Hoeven that resolving the fiscal cliff has to do with spirit. "There's no rancor here, just pro-growth. Pro-growth gets the job done. Sen. Hoeven is speaking for a lot of people in trying to rise above." What's needed is leadership from President Obama, who must come out and say we're going to get this done.

Executive Decision

As the cliff looms, what about retail? Specifically, what about the high-end retail customer? Cramer talked to



CEO Steve Sadove, who said the rich are less concerned about having their taxes raised and more concerned about avoiding a fiscal cliff that will do long-term damage to the stock market.

How do Saks customers fell about their net worth at the moment? "At around 13200" where the stock market closed, "they're not feeling too badly," he said. But that could change come Jan. 1 with no deal.

Hurricane Sandy had an impact on Saks, forcing the closure of 11 of it 45 stores, including the flagship Fifth Ave., New York store. It also had an impact on projected sales, which are now expected to be flat after projected growth of 3-4%.

Still, Sadove said, he's optimistic, particularly as more shoppers use the Internet and other channels to buy. He called this a "transformative" moment for retail into which Saks is investing over $100 million. But Saks is also opening more of its Off 5th stores, which offer 40%-70% discounts on goods to shoppers looking for "brands and a deal."

Cramer said SKS is an inexpensive stock and a "very good call if you think the stock market is going to go higher."

Lightning Round

In the Lightning Round, Cramer was bullish on








(YELP) - Get Report


He was bearish on


(CSCO) - Get Report


MarkWest Energy



Cirrus Logic

(CRUS) - Get Report


Parker Drilling

( PDK)


(AA) - Get Report


Carrizo Oil and Gas

(CRZO) - Get Report


What's Up With YUM?

Following a 4% sales decline in China in the fourth quarter,

Yum Brands

(YUM) - Get Report

was downgraded by two banks. Then, last week, two other banks backed the parent company of Pizza Hut, Taco Bell and KFC.

Cramer said the China comparative sales were up 21% a year ago. He considers the recent slip in China sales a bump in the road. "When it comes to reading China," he said, "I say you give Yum the benefit of the doubt."

"China has new leadership and they will do what it takes to get the economy moving, and moving fast," Cramer said.

"Yum is not the kind of company to sit and wait for the China economy to improve on its own," he said. Yum's strategy is to expand from the tier one cities in China to the outer cities where costs are low and the competition is rare.

"If Yum takes a lesson from


(MO) - Get Report

and breaks up, I think the sum of its parts could be worth $77 a share," he said. That's up about 14%. The domestic business is strong enough to stand on its own and the international business is sizzling.

"I think the bulls are right and the bears are letting a short-term Chinese speed bump scare them away from what I regard as a great story," Cramer said.

"The story would be better if Yum breaks itself up into a fast-growing international company and a value-oriented domestic play. That could create instant profits for all aboard," Cramer said.

No Huddle Offense

Government has been known to make some stupid investments, Cramer said, but one of the best ever made was when the federal government invested in

American International Group

(AIG) - Get Report

during the 2008 financial crisis.

Today, Cramer said, the government announced it would be selling its remaining stake. The government did the right thing in putting money into AIG, he said, and he thanked in particular Tim Massod, who was in charge of the Treasury's TARP unit overseeing AIG, for not selling government shares until it could get a good price, and AIG CEO Bob Benmoshe, who "came in and through sheer force of will fixed the darn thing and now it's riding higher than before."

This was one case, Cramer said, when the federal government "sure made shareholders winners."

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-- Written by Anthony Buccino and Margo D. Beller in New York.

At the time of publication, Cramer's Action Alerts PLUS had a position in AAPL, AIG, SLB.

Jim Cramer, host of the CNBC television program "Mad Money," is a Markets Commentator for, Inc., and CNBC, and a director and co-founder of All opinions expressed by Mr. Cramer on "Mad Money" are his own and do not reflect the opinions of or its affiliates, or CNBC, NBC Universal or their parent company or affiliates. Mr. Cramer's opinions are based upon information he considers to be reliable, but neither, nor CNBC, nor either of their affiliates and/or subsidiaries warrant its completeness or accuracy, and it should not be relied upon as such. Mr. Cramer's statements are based on his opinions at the time statements are made, and are subject to change without notice. No part of Mr. Cramer's compensation from CNBC or is related to the specific opinions expressed by him on "Mad Money."

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