"It would be impossible for the president of the republic to approve something of this nature," he said in a rare weekend news conference.
"We all agreed there isn't the slightest basis... For going ahead with this proposal," he added, sitting alongside the speakers of the lower house and Senate.
Temer -- whose government is fighting several scandals of its own -- was responding to outrage over an attempt in the lower house on Thursday to vote on a bill apparently including an amnesty for the previous use of slush funds in political campaigns.
Temer said he wanted the amnesty controversy to be set aside so that Congress can focus on passing his proposed 20-year spending ceiling -- the first of a series of austerity reforms aimed at pulling Brazil out of its worst economic slump in decades.
The lower house has approved the ceiling and the Senate is due to hold a first vote Tuesday.
"We will propose reforms so that Brazil can exit the recession," Temer said. "We will boost industry, business and agribusiness.
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