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Cramer: McConnell's comment on the debt ceiling an 'underpinning for a potential rally'

  • "I think McConnell is trustworthy on this issue," Jim Cramer says.
  • Cramer adds that he does not think that means the Trump administration will get anything done on taxes soon but at least "we're not going to suffer from a debt downgrade."

Senate Majority Leader Mitch McConnell's insistence that the U.S. government will not default on its debt may have laid the ground work for a potential rally, CNBC's Jim Cramer said Tuesday.

During a public event Monday in Kentucky with Treasury Secretary Steven Mnuchin, McConnell said there was "zero chance — no chance" that Congress would fail to raise the debt ceiling.

"(It) was really important and I think that can be an underpinning for a potential rally given the fact until he said that I think it was just chaos," Cramer said on "Squawk on the Street."

Cramer added that he does not think that means the Trump administration will get anything done on taxes soon but at least "we're not going to suffer from a debt downgrade."

"I think McConnell is trustworthy on this issue," Cramer said.

Regarding tax reform, Politico reported Tuesday that the Trump administration is making strides on finding the best ways to pay for individual and corporate tax cuts.

On Monday night, House Speaker Paul Ryan told CNN that getting tax reform through might be easier than overhauling health care.

Cramer said repatriation is key for tax reform. "One-time repatriation would make it so there is a lot of stocks that I don't like right now that I would really like."

Cramer added he doesn't see why Trump doesn't say, "tax reform is good for us — we all get more money."

"I do not understand the whole dialogue," Cramer said. "Health care is the hardest thing in the world. They picked the hardest thing in the world to start off with. Tax reform, where tax reform means tax cuts, we all favor tax cuts, particularly when it comes to election time."

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