Sen. McCain says Fed should have cut rates earlier

WASHINGTON (Reuters) - U.S. Republican presidential front-runner John McCain said on Sunday that Federal Reserve Chairman Ben Bernanke should have cut interest rates sooner.

"I personally would have liked to see those rate cuts earlier," the Arizona senator said on ABC's "This Week" news program when asked whether Bernanke has been too slow to act.

Amid economic data pointing to a possible U.S. recession and turmoil in credit markets stemming from a mortgage finance crisis, the Fed reduced interest rates twice in late January.

"I guess I would have to say I would have liked to have seen faster rate cuts, earlier than they were done by him. That doesn't mean I want him fired," McCain said.

On the possibility of recession and what the government should be doing about it, he said more federal budget discipline is needed to restore taxpayer confidence.

"The American people see their tax dollars being frittered away on wasteful and unnecessary spending, which by the way Sen. Obama has engaged in heavily, and Sen. Clinton has engaged in heavily," he said, targeting his Democratic rivals, Illinois Sen. Barack Obama and New York Sen. Hillary Clinton.

He praised the economic stimulus package recently enacted by Congress and he endorsed other economic initiatives.

"We need to have lower interest rates. I think we need to eliminate the (alternative minimum tax). I think we need to have depreciation in one year of business investment. I think we need to reduce the corporate tax rate," he said.

(Reporting by Kevin Drawbaugh; editing by Mohammad Zargham)