Republican presidential hopeful Mitt Romney says the US economy needs "dramatic" measures to recover from a deep recession, but not another federal stimulus package.

"I can absolutely make the case that now is the time for something dramatic and it is not to grow government," the multimillionaire former businessman and investor said in an interview that aired Sunday on CNN's "State of the Union."

Romney, who is challenging President Barack Obama in November's election, said that instead, he backs creating "the incentives and the opportunities" for big and small businesses to increase hiring.

The former Massachusetts governor favors lowering individual and corporate tax rates, slashing government spending and easing regulations on energy companies to help make America energy independent by 2020.

He has predicted that his economic plan would lead to 12 million new jobs created by the end of his first four-year term, and told CNN the framework would be part of the "normal process" of economic recovery.

"When you come out of the kind of recession we've had you should see this kind of creation," he added.

"We should be seeing 200, 300, 400,000 jobs a month to regain much of what has been lost. That is what normally happens after a recession, but under this president, we have not seen that kind of pattern."

Obama has slammed Romney's "fairy dust" tax cuts, claiming in an attack television ad that his rival would swell his own wealth while sticking the middle class with the bill.

The Federal Reserve has kept interest rates at historic lows, between zero and 0.25 percent, since December 2008 and dished out liquidity in a bid to spur recovery from the recession.

On Wednesday, the central bank said growth slowed somewhat in the first half of 2012, but shied away from launching a third round of quantitative easing, or asset purchases, dubbed QE3.