Last Chance for Bush to Redefine Legacy

Tonight's State of the Union address is one of the last chances President George W. Bush will have to frame his eight-year presidency.

A person familiar with the president's thinking said Bush is "fired up" going into the speech and plans to attempt to reassure Americans who are nervous about the economy. While he will acknowledge uncertainty in the economy, the president is expected to dismiss claims that the nation is in a recession.

The president will urge Congress to pass a bipartisan $150 billion economic stimulus package. The legislation, which Democratic leaders have agreed to, would distribute rebate checks of up to $1,200 to 117 million families.

Bush will also remind the nation about improved security in Iraq and attribute the improvement to his plan to build up troops there last year. A senior White House official has told ABC News that the president hopes to have 20,000 troops coming out of Iraq this summer. However, these are not new troops withdrawals, and there would still be 10,000 more troops in Iraq than before the "surge."

'Full-Throated' Appeal for Immigration Reform

Tonight the president also plans to give a "full-throated" appeal to Congress on immigration reform, the source tells ABC News, despite the fact that his immigration reform proposal stalled in Congress last year and isn't expected to be revived. The issue has become a political hot potato in an election year when Republican candidates are running away from Bush's proposal to account for millions of undocumented workers.

The president will argue that reforming the nation's decades-old immigration system is necessary.

Bush will also urge Congress to figure out a way to make progress on another one of his failed priorities: Social Security reform.

He is also expected to press lawmakers to reauthorize a domestic surveillance law that expires Friday.

Bush to Threaten Vetoes

The president also intends to warn Congress that in his last year in office, he will veto any legislation loaded with so-called "earmarks" or special project spending that members typically slip into bills that Congress has already debated them. CLICK HERE TO READ MORE ABOUT POSSIBLE WHITE HOUSE VETOES The "earmarks" have become a common way for members of Congress to funnel federal money into their districts, sometimes creating jobs.

"These earmarks get stuffed into conference reports and never get voted on," complained a source familiar with the president's thinking.

Bush intends to issue an executive order saying he will not abide by any earmarks that are not written into the legislation itself, and debated and voted on in Congress, the source said.

"Last year I asked [Congress] voluntarily to reduce those," Bush told ABC News' Ann Compton earlier today in an exclusive interview in the Oval Office. "This year I am going to veto any bill that doesn't cut them by 50 percent and will issue an executive order tomorrow to make it clear to agencies that money will not be spent unless it's been voted on by the Congress."

Listen to the interview HERE.

U.S. Intelligence on Iran: 'Not Worth a Damn'

The president's final address will also deal heavily with foreign relations, a senior White House official told ABC News.

Bush is optimistic about achieving some kind of agreement with the Israelis and Palestinians on a Palestinian state to live side-by-side with Israel, but the senior White House official said the president recognizes that the step would be affected by the waning political strength of Israeli Prime Minister Ehud Olmert.

Former President Bill Clinton also attempted to broker a peace agreement between the Israelis and the Palestinians. Bush, who recently returned from a multi-country trip in the Middle East, believes history may be on his side.

"The difference between now and the end of the Clinton administration is that [PLO leader Yasser] Arafat is gone. Arafat didn't deliver for Clinton, and now there are Palestinians who want a democratic Israel," said a senior White House official.

As for Iran, Bush believes it is in the best interest of the nation to leave the possibility of an attack on the table while diplomatic efforts are being pursued, if Iran does not respond to international pressure to cease its nuclear activities.

The president believes "our intelligence isn't worth a damn inside Iran," a senior White House official told ABC News. "We're not inside the Iranian government... we're reading tea leaves."

Bush and his team of three speech writers have been honing this year's State of the Union address since December.

During his almost eight-year presidency, Bush has framed ambitious agenda items in the State of the Union, including deep tax cuts, vast changes in federal social programs, expansions of executive power and a broad remaking of energy and education policies.

But the president's second term has been defined by an unpopular war, low approval ratings and a midterm election that gave a slim majority of Democrats control of Congress.

The address comes as Bush slides increasingly into lame-duck territory, racking up miles globe-trotting around the world focusing on foreign relations, and as the nation is increasingly focused on the 2008 presidential election.

After more than seven years in the White House, the president faces a Congress led by Democrats, and an American public that largely believes the war in Iraq was a mistake and that is worried about the economy.

Seventy-seven percent of Americans believe the country is headed off on the wrong track — the most since the government shut down briefly in 1996, according to anABC News/Washington Post poll released earlier this month.

A majority of Americans, 66 percent, continues to disapprove of the way Bush is handling his job, and 64 percent said the war in Iraq was not worth fighting. By far the most pressing concern on the minds of Americans, however, was the flagging economy.

The president is expected to spotlight his economic plan as he gives the speech that could be his last, best chance to define his legacy.

ABC News' Ann Compton contributed to this report.