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John Edwards wants to punish Corporate America. John McCain would slash corporate tax rates. Mitt Romney is talking up his impressive business résumé.

With the U.S. economy flirting with recession, the race to succeed President George W. Bush is suddenly all about the economy. And that could benefit candidates, such as Hillary Clinton, who have a lot of experience, while making life uncomfortable for the entire Republican field.

“The party in power has never won an election during a recession,” pointed out Allan Lichtman, a historian at American University in Washington. “It's very hard for the party in power to win in a bad economy.”

Mr. Bush's call yesterday for a stimulus package of up to $150-billion (U.S.) has confirmed that the race for the White House now hinges on who can persuade Americans they have the right stuff to save the faltering economy.

Mr. Bush's plan, quickly welcomed by most of the presidential candidates, would include instant tax rebates to individuals and businesses.

Details must still be negotiated with the Democrat-held Congress.

“The advantage clearly goes to the Democrats,” agreed pollster Dick Bennett of New Hampshire-based American Research Group. “The economy is one more thing that isn't working under the current regime. The problem for the Republicans is that they're the party that owns George W. Bush.”

The housing meltdown, soaring fuel costs and Wall Street's messy retreat have pushed the economy decisively past Iraq as the most pressing issue on the minds of U.S. voters.

“I don't think any of the candidates expected the economy to be an issue, and so they campaigned on other things,” Mr. Bennett said. “The voters are demanding that the candidates pay attention and address the economic issue.”

Until as late as November, most national polls showed the Iraq war as the dominant electoral issue, ahead of health care, the economy and immigration.

Until recently, the leading Republican hopefuls – Mr. McCain, Mr. Romney, Mike Huckabee and Fred Thompson – had seemed content to burnish their credentials on core conservative issues, including social values, immigration and small government.

Now, that doesn't seem like a winning strategy.

“Everyone is talking about the R-word now,” said pollster Terry Madonna, director of the Center for Politics and Public Affairs at Franklin & Marshall College in Lancaster, Pa.

“The economy will now dominate the election in a major way, and that's a serious issue for the Republicans, particularly if things get worse.”

Mr. Madonna, who oversees the statewide Franklin & Marshall poll, said his data show that on economic issues voters trust Ms. Clinton, a U.S. Senator and former first lady, over either Barack Obama or Mr. Edwards.

Ms. Clinton issued a statement yesterday on Mr. Bush's proposal: “For the White House to propose spending over $100-billion to jump start the economy, while shortchanging assistance to the 50 million families who are struggling the most and are most likely to inject those funds into the economy makes no sense.”

Mr. Edwards has talked about economic issues more than any candidate. But his anti-corporate and anti-trade message has limited appeal, Mr. Madonna said.

Mr. Lichtman, the historian, said Mr. Obama's “change” message might gain traction, if he succeeds in making this about the economy.

On the Republican side, the clear edge goes to Mr. Romney, a Harvard University MBA and founder of takeover firm Bain Capital, he said.

Speaking to reporters in Reno, Nev. yesterday, Mr. Romney said Mr. Bush's “outline, of course, was in broad strokes. And it makes a good deal of sense. I will be announcing my economic stimulus plan soon. And you will see it has many similar features. I think the president wants to work with the Democratic Congress to see if he can't get something done on an urgent basis. I think it is essential that the economic stimulus plan is passed very, very quickly, so that it can have the stimulative effect that our economy needs.”

Indeed, exit polls after this week's Republican contest in Michigan, which Mr. Romney won decisively, showed that voters didn't respond well to Mr. McCain's blunt message that many factory jobs will never return to the hard-hit state. More than half of voters there said the economy was on the top of their minds, or about 20 percentage points above the national average.

Weighed down by layoffs and bankruptcies in the automotive industry, Michigan is likely in recession already – a preview of what could befall much of the rest of the economy.

Mr. Romney played up his background in business and promised “a new day for Michigan” by creating jobs for the future. Mr. McCain promised a concerted effort to retrain laid-off workers, and Mr. Huckabee talked up his national flat tax.

Mr. Bennett, the pollster, said Mr. Romney must do an even better job in subsequent primaries of positioning himself as the competent manager who can fix the economy.

“That's what he is – a very pragmatic business guy,” he said.

Sensing urgency in the changing political mood, the White House has now moved into damage control on the economy.

Mr. Bush's announcement comes on the eve of today's presidential caucuses and primaries in Nevada and South Carolina, and less than three weeks before a spate of big-state primaries on Feb. 5.

After unveiling his stimulus plan at the White House, flanked by Treasury Secretary Henry Paulson and Vice-President Dick Cheney, Mr. Bush later talked up his plan at a factory in Frederick, Md.

“We need to get this deal done and get it out,” he said. “I believe we can come together on a growth package very quickly.”

Mr. Paulson estimated that Mr. Bush's goal of a package worth 1 per cent of gross domestic product would amount to $140-billion to $150-billion, split between tax breaks for individuals and businesses.

But Dan Mitchell, a senior fellow at the libertarian Cato Institute in Washington, is distressed that all of the candidates have endorsed a plan that would merely shuffle resources from one part of the economy to another.

“What everyone is talking about is buried in the 1970s,” Mr. Mitchell said. “It's easy money and Keynesian tax relief. Politicians are trying to buy votes and it won't work. You borrow money from one sector of the economy and relocate it to another.”