Summers: Economy Backs Away From Abyss

WASHINGTON -- The United States averted a financial catastrophe but sustainable recovery depends on redirecting the economy away from consumption, a top White House economic adviser said on Friday.

In excerpts of remarks prepared for delivery later on Friday, Lawrence Summers also defended President Barack Obama's "ambitious" policy agenda, saying it would lay the foundation for future prosperity.

"We were at the brink of catastrophe at the beginning of the year but we have walked some substantial distance back from the abyss," Summers said in excerpts of a speech released by the White House. "Substantial progress has been made in rescuing the economy from the risk of economic collapse that looked all too real six months ago."

Summers said the rebuilt U.S. economy must be more export-oriented, with less of a focus on consumer spending and the sort of financial engineering that has been blamed for contributing to the current economic crisis.

The economic recovery should be "more middle-class-oriented and less oriented to income growth that disproportionately favors a very small share of the population," he said.

Critics of Obama's policy plans, which include reforming health care and addressing climate change, have argued that it is overly costly and ambitious -- particularly in the middle of a deep recession. However, Summers said the reforms were essential for repairing the economy.

"Yes, the President has an ambitious agenda," he said. "But it is an agenda comprised of measures that lay a foundation for future prosperity and for the confidence on which the current recovery depends."