It's only two weeks until the deadline for budget reform, but Republicans have rejected a tax vote in Congress.

The bill was a proposal to raise taxes for the wealthy, but was cancelled after pressure from Republicans. John Boehner championed the bill, and the incident is likely to weaken his position.

“The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator [Harry] Reid on legislation to avert the fiscal cliff” Boehner said in a statement.

Here's the FT:

The failure to hold a vote – after a desperate arm-twisting campaign by Republican leaders – marks a serious miscalculation on the part of Mr Boehner, who hoped the measure’s passage would increase his leverage in talks with President Barack Obama.

It now casts doubt on Mr Boehner’s ability to muster support for any deal he might cut with Mr Obama, leading to pessimism about the prospects for any agreement ahead of the year-end deadline.

But if rules aren't decided by the start of January, large tax rises and spending cuts will come into effect, amounting to a hit of $600bn to the US economy. Analysts worry that this will lead to another recession.