Washington ? The Senate gave final approval Thursday to a $70 billion election-year package of tax cuts that will extend lower rates for investors and save billions for families with above-average incomes.

Republicans promised the bill will produce economic gains for the nation – and hoped it would give a much-needed boost to President Bush and the GOP-controlled Congress as they both experience their lowest approval ratings in polls since his election in 2000.

The bill passed the Senate by a 54-44 vote, and Bush is expected to sign it next week.

Bush said in a statement that the bill “prevents an enormous tax hike that the American people do not want and would not welcome.”

The legislation provides a two-year extension of the reduced 15 percent tax rate for capital gains and dividends, currently set to expire at the end of 2008.

It also will extend for one year recent changes to the alternative minimum tax to prevent it from hitting more upper middle-income families.

The AMT was designed to hit the very wealthy, but it is now common for taxpayers, especially those with families in high-tax states, to pay the AMT on incomes of $100,000 and more.

The debate followed partisan lines, with Republicans eagerly crediting the tax cuts, first enacted in 2003, with a surging economy, millions of new jobs and booming tax revenues. Democrats overwhelmingly opposed the bill, saying its tax cuts on capital gains and dividends will flow mostly to wealthy.

Just three Republicans – Olympia J. Snowe of Maine, Lincoln Chafee of Rhode Island and George Voinovich of Ohio – voted against the bill. Democrats Ben Nelson of Nebraska, Bill Nelson of Florida and Mark Pryor of Arkansas, voted in favor.

Passage of the bill is the first step of a two-track strategy for advancing the GOP’s election-year tax cut agenda. Finance Chairman Charles Grassley, R-Iowa, said again Thursday that another bill containing widely backed tax cuts favored by Democrats would advance soon as part of a follow-up bill.

Even though Democrats generally opposed Thursday’s bill, they are big supporters of alternative minimum tax relief, which is the single costliest part of the bill at close to $34 billion.

The AMT was established in 1969 to ensure that all taxpayers pay at least some tax, but it was not indexed for inflation. Now, it often hits better-off taxpayers in Democratic-leaning high-tax states such as New York and California, where it threatens benefits such as the child tax credit or state tax deductions.