A congressional subcommittee investigating the recent implosion of the $3 trillion municipal bond market wants analyst Meredith Whitney to come clean and explain her doomsday prediction of hundreds of billions of dollars in muni defaults over the next year.

The subcommittee, headed by Congressman Patrick McHenry, R-NC, has launched a broad investigation into the struggling market for debt issued by states and cities to determine, among other matters, whether states should be able to declare bankruptcy amid widespread fiscal woes, particularly in the Northeast, and exactly what has caused a sharp decline in prices in recent months.

As part of this inquiry, the subcommittee is looking into the validity of Whitney’s call made on national television that predicted between 50 and 100 major municipal bond defaults over the coming year, which would cost investors hundreds of billions of dollars in losses. The call sparked massive panic among small investors -- the largest purchasers of muni bonds -- because of the tax advantages. 

Many small investors unloaded their bonds, and redeemed shares of municipal bond mutual funds, at a loss.

Many top municipal bond analysts have taken issue with Whitney’s prediction, saying such levels of defaults are unprecedented even during tough economic times. McHenry told FOX Business the subcommittee called Whitney to get to the bottom of the debate. 

“We want her to fill out her views one way or another,” he said.

But Whitney has so far rebuffed the committee's attempts to have her appear at the hearings scheduled for February 9, and there is talk on the committee about subpoenaing her to appear, as well as subpoenaing her to produce her controversial report on municipal bonds.

As first reported by FOX Business, Whitney’s report differed substantially in tone from her comments. In fact, the report stated that despite large state budget gaps, there would likely be no defaults on the state level, and it made just a passing reference to some defaults among municipalities.

Many analysts have criticized Whitney for the differences between the report and her public comments, saying that she was looking to gain public attention and needlessly worried investors. 

Charles Gasparino joined FOX Business Network (FBN) in February 2010 as Senior Correspondent.