Jan. 28 (Bloomberg) -- George W. Bush, struggling to stay relevant in the twilight of his presidency, delivers his final State of the Union speech tonight with an urgent new mission: heading off a U.S. recession.

Bush is up against a hostile Congress, is competing for attention with the race to succeed him and draws criticism for his economic performance. By heading a bipartisan effort to enact a $150 billion stimulus program, he may at least partially mitigate the legacy of his previous failures to forge consensus on revamping immigration laws and overhauling Social Security.

The specter of recession also gives him a chance to show leadership and define his final months in office through something other than the Iraq war, which has helped push his approval rating to 34 percent in the most recent Bloomberg/Los Angeles Times poll.

``It's an opportunity for Bush to put something on the positive side of his legacy,'' says David Kennedy, a historian at Stanford University in California.

Bush has wasted little time since early December in pushing his fast-track rescue strategy, first floating a stimulus proposal, then convening talks with congressional leaders. The reaction to his efforts will help determine whether he has any credibility left on the economy, says Leon Panetta, former chief of staff to President Bill Clinton.

`Pretty Drab'

``Normally, these State of the Union speeches can be pretty drab,'' Panetta says. Tonight's address is different because the ``the country is in deep economic crisis'' and Americans are looking for answers from their political leaders.

Bush tonight will promise to veto any spending measure that doesn't cut money for lawmakers' pet projects -- so-called earmarks -- by half from current levels, and he'll issue an executive order tomorrow to ignore any earmarks that aren't a part of the law, White House spokesman Tony Fratto said.

Congress this year approved more than 11,700 earmarks worth more than $19 billion, the White House budget office said on its Web site.

In his speech tonight, Bush also will make another appeal for making permanent his 2001 and 2003 tax cuts that begin to expire in 2010, ``so that 116 million Americans don't see taxes rise by $1,800'' in two years, White House press secretary Dana Perino said today.

`Follow Through'

Bush will press Congress to enact the economic stimulus package quickly. ``The American people expect that we should be able to follow through on a bipartisan agreement,'' Perino said on CNN.

President Jimmy Carter faced a similar credibility hurdle in the summer of 1979, when the economy was sliding into recession and an energy crisis triggered soaring fuel prices and gasoline lines. Carter repaired to Camp David for more than a week, summoning politicians, labor leaders and clergymen to solicit ideas for a presidential address.

His speech, which seemed to accuse Americans of giving in to a ``crisis of confidence,'' flopped, says Panetta, who was a member of Congress at the time. ``Carter never had the ability to really influence public opinion, whether it was style or substance.''

Tarnished Reputation

It remains to be seen whether Bush's speech tonight, along with his current burst of economic activism, will improve his tarnished crisis-management reputation following his response to Hurricane Katrina or reverse the widespread perception that his economic policies are out of touch with the needs of average working Americans.

Fred Greenstein, a presidential scholar and emeritus professor at Princeton University in New Jersey, says while a crisis poses an opportunity for even a weakened leader, the question for Bush remains whether he can ``provide a capstone to his presidency that will give the obituaries a more positive tone than just, `This is the guy who got us in a horrible mess.'''

Bush isn't the only actor in the anti-recession drama: Federal Reserve Chairman Ben S. Bernanke's Jan. 22 reduction in the federal-funds rate by three-quarters of a percentage point was the largest in the two decades that the rate has been the principal tool of policy makers.

For Bush, though, the implications are political as well as economic, since success may help his fellow Republicans in the November elections.

The president is ``haunted by the perception that his father lost re-election in 1992 because he was slow to respond to that recession,'' says Nolan McCarty, a political scientist at Princeton.

Economic Contraction

Americans are increasingly expecting the economy to contract sometime this year, and they're looking to Democrats more than Bush for a solution, according to the Bloomberg/Los Angeles Times survey. More than two-thirds of people in the Jan. 18-22 poll said the economy was doing badly, up from 56 percent in December.

While both Republican and Democratic presidential contenders have made the economy a dominant theme in their campaigns, Bush will be able to use his State of the Union speech to take credit for the stimulus program, which includes tax rebates of up to $600 for individuals and up to $1,200 per couple, with an additional $300 for each child.

Checks would be in the hands of consumers in about two months once the measure is signed into law, said U.S. Treasury Secretary Henry Paulson, who announced the agreement on Jan. 24 with House Speaker Nancy Pelosi, a California Democrat, and House Minority Leader John Boehner, an Ohio Republican.

Generous Write-offs

The plan, which still needs congressional approval, gives more generous write-offs for business investment. It also allows Fannie Mae and Freddie Mac, the largest U.S. mortgage-finance companies, to temporarily buy mortgages of as much as $729,750 from lenders, exceeding a $417,000 federal limit and potentially helping the housing industry.

At the outset of the negotiations, Bush signaled flexibility by ditching the idea of attaching a provision to make his expiring tax cuts permanent.

``We have an opportunity to come together and take the swift, decisive action our economy urgently needs,'' Bush said when announcing the agreement.

Even though Republicans and Democrats concur on the need to act, there still may be obstacles to Bush's ability to steer a stimulus package through Congress quickly.

Senate leader Harry Reid, a Nevada Democrat, says his chamber will look to ``improve'' the plan by adding money for items such as unemployment benefits and nutrition assistance.

Rebates `Won't Work'

Meanwhile, some Republican fiscal conservatives are critical of the package. ``Rebates haven't worked in the past, and in my opinion they won't work in the future,'' says Jack Kemp, a former congressman and Republican cabinet official and the party's 1996 vice presidential candidate. ``It rewards past production.''

Others contend the proposed stimulus is a reflex by panicky politicians and won't be nearly as effective as cuts in business and individual tax rates.

Bush ``lacks the leverage to press for what he really wants: making his expiring tax cuts permanent,'' says Bruce Altschuler, a political scientist at the State University of New York in Oswego.

Still, some economists praise Bush's performance in guiding the stimulus package thus far. His team's ``mode of operation is now radically different from what they've been doing for the last seven years,'' says Jeffrey Frankel, a former Clinton administration economist who teaches at Harvard University's Kennedy School of Government in Cambridge, Massachusetts.

``They admit there is a problem with the economy, rather than continuing to pretend everything is wonderful,'' he says.

To contact the reporters on this story: Catherine Dodge in Washington, at Cdodge1@bloomberg.netHans Nichols in Washington at hnichols2@bloomberg.net

Last Updated: January 28, 2008 09:04 EST