Norquist pledge can send us over the cliff

If those who signed it believe compromise is heresy, we will end up with no budget deal.

By Jim Cramer Dec 3, 2012 9:59AM

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CorbisThe Republicans who signed the no-tax increase pledge -- the one put together by anti-tax strategist Grover Norquist -- have no room to maneuver when it comes to compromising to avoid the fiscal cliff.


Norquist is the real force behind the Republican Party's strategy when it comes to the talks to avoid the cliff. He has made it clear to anyone who signed the pledge, and that's pretty much every Republican, that they will be embarrassed and shamed out of their "impure" thoughts. They will be forced to get back in line, or risk being outed as closet Democrats who favor bigger government and higher taxes.


In other words, those who signed an allegiance to Norquist have no choice but to send us over the cliff. They are duty-bound to do so, frankly, regardless of whether they like it. They took the pledge; they have to swallow the cliff medicine.


Unless the pledge is broken by those who signed it, there won't be enough votes to put through a package to avoid the cliff.


Put aside for a moment the issue of whether you hate President Obama or like him. I know, I know -- that's virtually an impossibility these days. But accept the view that the president will not accept any deal that does not have tax increases.


Then accept that Norquist, who is by far the most powerful ideological force behind the Republican Party, will not allow those who signed the pledge to get out of it without a promise that they'll be fired by their constituents.

Assuming these two factors, there will be no choice. We will have to get the onerous austerity package -- the one that was created to give us Spain-like budget cuts and tax increases -- even though we are nowhere as profligate and anti-tax as the Spanish had been before their forced cliff jump.


Now, I am sure many of you say, "Wait, why doesn't the president have to give? Why doesn't he have to surrender to Grover Norquist, too, in order to get a deal done? Why doesn't he have to bend his will?"


Don't laugh, but when I pulled up with Norquist, an old acquaintance from college, he marveled at how obtuse the president was not to see that we need to prevent tax increases. He appears to believe that, if the president were to sign the no-tax-increase pledge and then go with the program cuts wanted by the Republicans, there will be no deficit and the U.S. will grow to the sky.


That's my summary of Norquist's view, whether Norquist thinks that's accurate or not. You can't help but draw that conclusion.


Here's the issue with our obstinate president. He campaigned and won on a pledge to raise taxes and cut spending. Norquist didn't campaign. He didn't win. The president is all hung up on his pledge -- the one that the voters agreed with.


The fact is, again, regardless of whether you like him, the president has said he will be willing to cut spending. He awaits the Republican anti-spending plan. If they propose one, I think he will agree with some of it, provided that the Republicans agree to some tax increases. It is called "compromise" where the president comes from.


Where Norquist comes from, it is called "heresy." No compromise is allowed. That, to me, is why the only hope for a deal is to have the pledge broken in favor of avoiding the fiscal cliff. Norquist doesn't care about the consequences of the cliff; he cares about exacting the consequences of violating the pledge.


I think we have to stop obfuscating. If you think the no tax-increase-pledge must be upheld, then you can't believe in compromise. If you can't believe in compromise -- which, in this case, would mean tax increases and spending cuts -- then enjoy the cliff jump, because it simply must occur.


I'll have more on what that world looks like later in the day. But let's just say that, if you like stocks going higher, you want the pledge broken. If you want them lower, then go with the pledge.


Cramer's face


Jim Cramer is a co-founder of TheStreet and contributes daily market commentary to the financial news network's sites. Follow his trades for Action Alerts PLUS, which Cramer co-manages as a charitable trust.




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Dec 3, 2012 2:11PM
Just go over the clilf and let the chips fall where they may.  Both sides get off the hook. Republicans can say they did not violate the pledge and Democrats can say the Bush era tax cuts expired because they were temporary.  Then maybe both sides can get down to working for the country.
Dec 3, 2012 12:24PM
I'll say it again...This jerk (grover) is a bully and a dictatorial political cult leader. He is not elected to anything, deriving his "power" from self anointing, and the gullibility of those who signed and continue to adhere to this "pledge".  Embarrassingly, my congressman (rob bishop) is among the lemmings who populate the halls of congress. Shame on us for having re-elected him.
Dec 3, 2012 12:15PM
Republicans and Democrats always break their pledges. Why would the Grover Norquist  pledge be any different for the Republicans to break? Didn't they pledge to compromise? This 2 party 180 degree polarization in this country really sucks. I'm beginning to think that both parties would rather see this country fall apart and burn in flames than to reach an agreement with the other party.
The big picture is clear but neither party can seem to see it with their blindfolds on.
Dec 3, 2012 11:56AM
So, Jimmy, your solution?   Keep putting off the problem and let the cliff go higher and higher and higher?  If we are going to fall off of a cliff, which this nation is going to do eventually, I would much prefer for the cliff to be 20 feet high as opposed to 200 feet high.  I can live with a broken leg but I dont think I could make it falling 200 feet.
Dec 3, 2012 1:36PM
how about they pledge something novel and new  ?to act on best behalf of the majority of people in this country instead of catering to people like grover
Dec 3, 2012 1:41PM
Why does no one address the problem of our representatives making pledges to a person about the way they will vote on certain issues, when they are supposed to pledge their loyalty to the American people whom they serve. Why is it even legal for representatives to make such pledges? Maybe they should not ever be sworn in if they take these outside pledges that obstruct their ability to compromise as they legislate.
Dec 3, 2012 11:02AM
i'm starting to agree with someone's comment here that BOTH parties want the cliff to pass so they can claim they didn't vote FOR it and no one proposed anything to correct or modify it.  once the cuts are in place, some tax relief can be re-established. 
Dec 3, 2012 1:19PM
"I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them." - Thomas Jefferson
Dec 3, 2012 3:01PM
IT is time to go off the cliff. We have been held hostage for the last 6 years with this crap from both parties. Go off the cliff will allow the rich to pay more and will allow the spending cuts needed. (By the way Obamacare has not even been figured in the equation yet. )

Better now to go over the fiscal cliff


look at it this way the national deficit is about 1.8 trillion and as more and more baby boomers retire and minimum wage slum workers replace them the deficit is only going to grow bigger.


To trim $1 trillion over 10 years or 100 billion a year (even this does not start right away but in a couple of years)  is not going to put a dent in the national deficit it will grow by this amount or more each year


We are so doomed folks looking only two years out the deficit will hit $2.5 trillion and only get worse.


The policticians are not telling you the truth. The Federal Reserve is having to buy US debt just to keep the country afloat. And those mafia guys are not going to do it forever.

Dec 3, 2012 12:05PM
Maybe BoBo should try explaining what is wrong with the Norquist Pledge in the light of the exposed abuse of the Federal Government when it comes to spending? What is wrong with you people that think we should give them more tax money when they don't spend what we give them now responsibly? It's like telling your kid he can't buy candy instead of a balanced lunch. You don't fix that problem by raising his allowance.
Dec 3, 2012 12:04PM

We have compromised ourselves into over 16 trillion dolars in US debt, over 121 trillion dollars in US unfunded liabilites, and over 4 trillion dollars in debt among the 50 US states.


We are such fools!! "Thank you sir, may I have another?"

Dec 3, 2012 12:01PM
The rich pay 35% my @ss ....even romney (who)  adMITTed that he paid only 15% .......most of them pay their accountants more than they pay their country!!
Dec 3, 2012 12:58PM





                                          People are as Powerful as we allow them to be!



                                                                                       Thomas   Jefferson

Dec 3, 2012 2:56PM
I noticed today that the press is all up in arms because someone put a bobblehead of Obama ina jar of urine...    After 11,000 plus emails saying this crossed the line, the person that showed this displayed a picture of a cross in a bottle of urine that the same liberals praised as art, at a NY museum.  Worse still the cross in the bottle was paid for with taxpayer subsidies.

I wonder how they would feel if someone put a Koran or Jewish star in such a bottle?   

Maybe the taxpayers never should have paid for this display in the first place?   Where are the liberal's now defending this as art?

Too funny....   
Dec 3, 2012 12:38PM

I would rather take a pledge from lawmakers that any new war is coming with a war tax in exact amount of the war chest and for the duration. If you compare to the family budget the "rain-day funds" are put aside when the sun shines (and that was in 2000) and not when heavy rains are on us.

This way or that we will have to pay for the war we approved as a whole to profit few. 

Dec 3, 2012 11:59AM
CNBC has become a voice for the rich ......santelli's latest rant about the "blame game" where he says we cannot move forward if everyone is blaming the other side and then he quickly moves on to defend norquist and blame President Obama toothed doosh ...... and cramer what the hell did you "pull up" with norquist? Your pants ?

Also who voted for Norquist and the koch sukker sisters .....NOBODY !!!!!  
Dec 3, 2012 3:00PM

There comes a time when spending must cease - just because you still have checks in your checkbook doesn't mean you have money.  There comes a time when there is to much administration and not enough workers to support the top.  A skyscraper will not stand on to small a foundation.  You cannot add to the top of a building by taking materials from the foundation and adding it to the top.  Someone has to take the responsibility for putting a stop to the ever increasing waste, overspending, and expanding government.  We cannot pay the national debt, nor balance the budget by expecting an already overtaxed population to pay even more.  We can however begin to repay the debt by passing on the cost of doing business in America to those that benefit from it most; by reinstating the import tax and that includes goods produced in foreign countries by American corporations.  Give them tax breaks to bring home the work and additional tax penalties if they don't.  You all claim to want the jobs brought home and yet none of you have given any suggestion about doing so.  The jobs go overseas because it's cheaper there.  Duh!  How do we stop that?  By making it more expensive to work there than here.  We were a prosperous nation when we had the import taxes and tariffs.  Which was done away with by NAFTA put into effect by Bill Clinton another ignorant democrat.  We are a nation capable of self sufficiency and yet we have given away most of our independence to third world countries because they are willing to work for it for less.  Yes, if we impose the taxes we will pay more - for a while, until the jobs come home and the people return to work and the money begins to stay here instead of flooding out of our coffers and into foreign countries.  It will take time but we would return to having more GNP than debt.  I personally don't care what party does it - Just grow a pair and "Git 'er done!"

Dec 3, 2012 12:17PM

Compromise is also not coming out of the mouths of the Democratic leadership in Congress. 

Dec 3, 2012 12:36PM
It kind of goes beyond just signing the Norquist Pledge it identifies a huge problem in America. Basically, if any group, network, religion, association, club, collective, cell, sect... whatever, gets into a position of influence or authority YEA THAT MEANS LOBBIES TOO... they become terrorists by application. I can't think of anything better right now than to hold a vote in each state where elected Officials signed that Pledge and determine if the position represents the majority. If not, the cases begin to try them as terrorists. We have a war of terror so the scenario is already paved... years in a far off prison, neglect and psychological duress, finally, a military style tribunal where the matter is represented as crimes against the nation. Every single corporation where online job applications were used but alumni buddies got the roles are terrorists too.

America was attacked during the Bush Administration. While I lament for those killed in the 9/11 crashes, no one can deny that paper and button pushing FREAKS took us administratively over and drove us to today's brink of ruin. The BELL TOLLS, it tolls for connivers and jivers who didn't want to really work for a living but assumed themselves worthy of the perks AND for those who made wages and salaries for their working life and now condemn those who do now. Time for change has passed. Time for CORRECTION is here. ZERO tolerance for the Norquist thugs and the GOP Adverse Agenda.

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