"The American economy is growing stronger," Bush said to applause in his election-year State of the Union address before Congress.
"The tax relief you passed is working," he said of the cuts totalling some $1.7 trillion over ten years.
"What the Congress has given, the Congress should not take away: for the sake of job growth, the tax cuts you passed should be permanent," Bush said.
Bush cited numerous signs of renewed economic vigor, but glossed over the unusual divergence between strong growth and tepid jobs creation, saying simply: "Jobs are on the rise."
Analysts say that divergence is the main reason the economy, which has shed 2.3 million jobs since Bush took office, could prove to be a weak spot for the president when he faces re-election in November.
"I think there's just two different worlds here - the world the president talks about and the world that Americans are living," Democratic presidential hopeful Senator John Kerry of Massachusetts told NBC.
The debate over taxes offers one of the clearest divides on economic policy between Bush and the Democratic presidential hopefuls, who have all called for repealing at least part of the tax cuts.
Ethan Siegal, president of the Washington Exchange, an adviser to institutional investors, said the call to make the tax cuts permanent sets the stage for a big fiscal battle.
"That's going to be the number one fight this year," he said. "The odds are that there are enough votes to block it."
An ABC News/Washington Post poll released on Tuesday showed a slim majority of Americans approved of how Bush was handling the economy. But 50 percent said they would prefer if Democrats held the economic reins, compared to 43 percent backing Bush.