WASHINGTON -- Senator Charles E. Schumer of New York, the Senate's third-ranking Democrat, threw cold water on Tuesday on one emerging approach for striking a bipartisan deficit-reduction deal -- an overhaul of the tax code that lowers top income tax rates but raises more revenue. Mr. Schumer's position complicates efforts to seal a deal before January, when the "fiscal cliff" of tax increases and automatic spending cuts goes into effect.
In a speech to the National Press Club, Mr. Schumer branded the idea of a tax code overhaul that could simultaneously lower the top rates, bring in more revenue and protect middle-class taxpayers from increases as "little more than happy talk."
Instead, he said that the top two income tax rates should be frozen around 36 percent and 39.6 percent, which are levels from the Clinton era, and that any additional revenue generated by closing loopholes and curtailing or eliminating tax deductions and credits should be devoted to deficit reduction.
"It is an alluring prospect to cut taxes on the wealthiest people and somehow still reduce the deficit, but you can't have your cake and eat it too," said Mr. Schumer, a member of the tax-writing Finance Committee. "The reality is, any path forward on tax reform that promised to cut rates will end up either failing to reduce the deficit or failing to protect the middle class from a net tax increase."
Republicans reacted harshly to Mr. Schumer's position, which they said could ensure that the nation careers off the fiscal cliff in January, when all of the Bush-era tax cuts expire and $1 trillion in automatic across-the-board cuts to military and domestic programs over the next 10 years begin to go into force.
"A tax reform framework that lowers rates and closes loopholes has support from both parties, including the Obama administration, and it offers the best hope for bipartisan efforts to create robust economic growth and reduce our deficit," said Kevin Smith, a spokesman for Speaker John A. Boehner of Ohio. "Senator Schumer seems to be off an island with these remarks."
Senator Lamar Alexander, a Tennessee Republican who is negotiating with Senator Michael Bennet, Democrat of Colorado, on a deficit-reduction framework, said: "While many of us from both parties are working quietly to try to find common ground for a budget agreement that will get the economy moving, Senator Schumer is on the front pages four weeks before an election offering a proposal to raise taxes. In my view, both his timing and his recommendations are unhelpful and unsound."
But some Democrats involved in the negotiations say Mr. Schumer's position could prove helpful by demarcating the left's opening position on tax cuts for the rich and by opening a new avenue for negotiation over entitlement programs. Mr. Schumer said Republicans would be drawn to the table by the prospect of making changes to Medicare and other entitlements. While he did not specify what changes he would accept, Republicans in deficit talks have demanded the restructuring of entitlements in exchange for added revenues.
A White House official said Mr. Schumer's remarks underscored President Obama's position that the wealthy and big corporations would have "to pay their fair share" in any deficit deal.
"Schumer's speech puts him squarely in the get-a-deal camp, and he willingly put entitlements on the table," said Jim Kessler, senior vice president for policy at Third Way, a centrist Democratic group. "That's a big move."
The speech also signaled that negotiations previously confined to backbench lawmakers are beginning in earnest. Leaders from both parties are becoming more engaged. Business groups and industry titans have rallied around a "Fix the Debt" campaign, which is led by Maya MacGuineas's Committee for a Responsible Federal Budget and is designed to pressure both sides to reach a deal before the first of the year. So far the effort has raised $30 million and hopes to more than triple that.
Republicans, and some senior Democrats, had been gravitating to a deficit-reduction framework that relied heavily on tax changes that lowered rates across the board to bring along both parties.
With enough changes to tax deductions and credits, negotiators argue that they could raise as much as $2 trillion over the next decade. Republicans could claim they prevented an increase in tax rates. Democrats could say they forced Republicans to add additional revenues to spending cuts to get a handle on deficits that again topped $1 trillion for the fiscal year that ended Sept. 30.
That framework was embraced by senators of both parties -- including the second-ranking Democrat, Senator Richard J. Durbin of Illinois -- when it was proposed by the chairmen of Mr. Obama's deficit-reduction commission, Erskine B. Bowles and Alan K. Simpson. Mr. Boehner has also accepted in theory that revenues from a tax overhaul could be used for deficit reduction, as long as the current tax rates do not rise.
The so-called Gang of Eight -- four Democratic senators and four Republican senators -- have been negotiating a deficit-reduction deal that embraces tax changes that lower rates and increase revenues as a central pillar. The group held a closed-door meeting on Tuesday.
The Republican presidential nominee, Mitt Romney, and his running mate, Representative Paul D. Ryan of Wisconsin, have also proposed overhauling the tax code to lower rates across the board, but they have said they want to keep overall revenues about where they are now.
With his speech Tuesday, Mr. Schumer is planting a new Democratic flag. Any overhaul of the tax code, he said, should freeze the top two personal income tax rates, hold the middle class harmless and raise rates on capital gains to close the difference between how the tax code treats earned and unearned income.
Mr. Schumer said the reason three years of bipartisan negotiations on the deficit have been fruitless is that they have started from a mathematically impossible position: that all tax rates should come down while revenues go up.
This article originally appeared in The New York Times.