Analyst: Chances of U.S. Default Now 20%

Source: WSJ
A Washington analyst said that the U.S. government now has a one-in-five chance of defaulting on its debt, citing the acrimonious debate in Washington over resolving the fiscal cliff.
“The next fiscal cliff is going to be more toxic and could end with an almost unthinkable conclusion: a technical default on the U.S. debt,” wrote Chris Krueger, a senior political analyst at Guggenheim Partners’ Washington Research Group. “We are raising our odds of a debt default from 10% to 20%. This is largely due to the brinksmanship and regained leverage that Republicans will have on the second fiscal cliff.”
In 2011, the U.S. government narrowly avoided breaching the debt ceiling when policy makers reached a last-minute deal to raise the debt ceiling in exchange for spending cuts. The U.S. government neared the debt ceiling again on Monday, and the Treasury Department has begun emergency measures to provide several more weeks of time before another potential debt crisis. Many Republicans have said they will demand deep spending cuts in exchange for any increase in the debt ceiling, but the White House has said it will no longer negotiate in this fashion.