(Updates with McCain comments on defense spending paragraph 11, age and temper paragraphs 16-19)

By Thomas Ferraro

WASHINGTON, April 20 (Reuters) - U.S. Republican presidential candidate John McCain on Sunday touted his plans to slash unneeded spending to balance the federal budget and dismissed Democratic rivals as "out of touch" on the economy.

"My critics ... think we're going to do business as usual in Washington. We're not," McCain said.

"I'm their worst nightmare," he added, referring to supporters of programs that he considers responsible for hundreds of billions of dollars in wasteful federal spending.

McCain also charged that Democratic White House foes Barack Obama and Hillary Clinton "are out of touch when they want to raise taxes (on the rich) at the worst possible time, when we're in a recession."

"We're going to cut taxes. We're going to reduce spending," McCain told ABC's "This Week" while Obama and Clinton campaigned for Tuesday's Pennsylvania Democratic primary.

"We're going to put a freeze on discretionary spending. We're going to make wealthy people pay for their own prescription drugs," McCain said.

Challenged how he expects to find enough savings, McCain said: "You scrub every agency of government. Is there any American that doesn't believe that there's tens if not hundreds of billions of dollars that can be saved?"