Image: Larry Summers
FENG LI  /  Pool via EPA
Larry Summers will return to Harvard University after leaving his post as director of the National Economic Council.
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updated 9/21/2010 7:19:19 PM ET 2010-09-21T23:19:19

President Barack Obama's top economic adviser, Lawrence Summers, plans to leave the White House at the end of the year, a move that comes as the administration struggles to show an anxious public it's making progress on the economy.

While administration officials Tuesday quickly sought to paint the announcement as an expected development, Summers' departure shakes up an economic team that has been under fire for its handling of the recovery. It's also a team already in transition following the recent departures of other high-profile Obama advisers.

In a statement, the president said he is grateful for Summers' service during a time of "great peril for our country."

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"While we have much work ahead to repair the damage done by the recession, we are on a better path thanks in no small measure to Larry's wise counsel," Obama said.

Summers will return to Harvard University, a move a senior administration official said was always part of Summers' long-standing plans. The official said the president asked Summers last fall to stay through 2010 in order to see through the passage of financial regulatory legislation and the continued implementation of the economic stimulus package. The official spoke on the condition of anonymity in order to discuss internal White House matters.

Summers is the third high-level member of Obama's economic team to leave in recent months, following the departure of budget director Peter Orszag and Christina Romer, head of the Council of Economic Advisers, both of whom left this summer. Treasury Secretary Timothy Geithner would be the only one of Obama's top-tier economic advisers to remain with the administration should he stay through the end of the year.

Geithner said in a statement that Summers' insights were essential in helping "guide us through the worst economic crisis since the Great Depression."

Summers' departure was first reported Tuesday by Bloomberg News.

With unemployment hovering near double-digits and the public growing increasingly worried about the slow pace of the recovery, Democrats fear the economy could lead to sweeping losses for the party in the midterm elections.

Last month the top House Republican, Rep. John Boehner of Ohio, called on Obama to fire Summers, Geithner and other members of the economic team.

"Never before has the need for a fresh start in Washington been more pressing," Boehner said during a speech in Cleveland.

At the time, the White House dismissed Boehner's calls as politically motivated. But during a town hall Monday, Obama wouldn't rule out changes on the economic team, saying only that he hadn't yet made any determinations on personnel matters.

"This is tough, the work that they do," Obama said. "They've been at it for two years, and they're going to have a whole range of decisions about family that will factor into this as well."

Republicans will interpret Summers' departure as a sign that Obama is rethinking his economic policy. But even some Democrats might quietly rejoice.

Summers, often seen with a Diet Coke in his hand, has a reputation as a brilliant, if occasionally smug, economist. During the debate over overhauling the nation's financial regulations, liberals bristled at Summers' rejection of proposals to place limits on the size of banks. They held him partly responsible for the deregulation of banks that occurred in 1999 while he was treasury secretary under President Bill Clinton.

When he returns to Harvard, he will be going back to his roots. At age 28 he became one of the youngest professors to receive tenure at Harvard. After leaving the Clinton Cabinet in 2001, he returned to Harvard as its new president, where he had a tense relationship with the university faculty. It erupted when he argued that gender differences explained why fewer women pursued math and science careers. He resigned in 2006.

In a statement, Summers said he will miss working with the president and the economic team but looks forward to returning to Harvard to teach and write about the economic fundamentals of job creation.

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Video: Summers leaving White House

  1. Transcript of: Summers leaving White House

    BRIAN WILLIAMS, anchor: Back in Washington , the White House announced tonight President Obama 's chief economic adviser Larry Summers is leaving to go back to a job at Harvard University by the end of the year. The president is reportedly considering replacing Summers with someone from the corporate world. That would be in response to criticism that his inner circle and economic team has been lacking private sector business experience.

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