"We need a welfare bill that's strong on work, not weak on work," Mr. Bush told about 2,500 people who crowded into the gym at Charleston's West Ashley High School.
Mr. Bush asked senators not to drag out renewal of a landmark 1996 welfare overhaul when that law expires at the end of September. The president said welfare rolls had been cut in half since the measure was enacted.
In a rare nod of approval to his predecessor, Mr. Bush described the Clinton era-welfare reform law as "a success story," reports CBS News Correspondent Peter Maer.
But he issued unusually pointed criticism of the welfare bill recommended by a Senate committee.
"Congress has got to choose whether or not we're going to continue to reform," Mr. Bush said. "The (Senate) bill would hurt the very people we're trying to help."
The White House also announced a Tuesday ceremony for Mr. Bush to sign into law a corporate accountability measure completed last week on Capitol Hill.
Later, Mr. Bush used the third South Carolina visit of his presidency to raise about $1 million for the state's Republican gubernatorial candidate, Mark Sanford.
Sanford was among the local political figures who greeted Bush on his arrival at the Charleston Air Force Base. The president stopped for a few minutes there to chat and shake hands with about 150 airmen.
Mr. Bush won the Republican-leaning state by a wide margin over Democrat Al Gore in 2000, and its early primary also provided the turning point in his GOP primary battle against Sen. John McCain of Arizona.
"I've got a lot of fond memories here, if you know what I mean," Mr. Bush told laughing donors at the luncheon, after introducing Sanford as "governor."
Congress has been bogged down in its attempts to renew the welfare law and revamp the program once again.
A bill passed by the Republican-controlled House reflects changes Mr. Bush supports, by requiring most welfare recipients to work 40 hours a week to continue receiving government checks — 10 hours more than is required currently.
Last month, the Senate Finance Committee approved a measure calling for work requirements to remain at 30 hours a week. Some Democrats want that number reduced, and critics want to give states more power to count education and training as work.
But disagreements among senators, primarily over whether the Senate's more generous child-care funding still would be enough, put in doubt when the Democratic leadership would call the measure for a vote on the floor.
A spokeswoman for Senate Majority Leader Tom Daschle said the South Dakota Democrat wanted to bring the measure up this year, despite his concerns about the level of child-care funding it includes.
In his speech, Mr. Bush highlighted the success of the 1996 law, which combined with the booming economy cut welfare rolls by more than half, and said tougher work requirements he is asking for would continue that progress.
"Help people themselves and amazing things will happen in America," he said. "Work is the pathway to dignity and to freedom and to self-respect."
In a rare area of agreement, both bills include $200 million to promote marriage among welfare recipients — a key demand of the president's.
Mr. Bush reiterated that the reauthorization "must" include provisions that encourage marriage and family and support teen abstinence programs.
"We've got to give people the tools necessary to improve their lives and, at the same time, understand how important work is in freeing people from the clutches of our government," he said. "The Senate must do the right thing."
The president's 37th fund-raiser of the year in the nearby town of North Charleston netted $1 million for Sanford and another $200,000 for the South Carolina GOP, White House spokesman Ari Fleischer said.
Mr. Bush held a private reception and photo opportunity with more generous donors ahead of the $500-a-plate luncheon attended by about 1,250 people.
That money will aid Sanford in paying for television ads to compete with Democratic Gov. Jim Hodges. Sanford has about $500,000 cash on hand, according to recent reports. Hodges has more than $4 million available.