The Turnbull government's bid to link disability funding to welfare cuts has backfired spectacularly, angering the Senate crossbenchers it was meant to win over and drawing fire from advocates and even a Paralympic champion.

The government had hoped to win support for its so-called omnibus savings bill by promising to direct $3 billion towards the National Disability Insurance Scheme. Another $1.6 billion would fund the Coalition's childcare changes.

But crossbench kingmaker Nick Xenophon officially torpedoed the plan on Tuesday, saying the trade-off was simply "too harsh".

"As a negotiating tactic, this is as subtle as a sledgehammer. Pitting battling Australians against Australians needing disability support services is dumb policy and even dumber politics," Senator Xenophon said.