"This is one phase of the president's program," Summers told CBS' Face The Nation host Bob Schieffer. "He's also committed himself to substantial efforts with respect to housing, to prevent foreclosures, to a financial recovery program that will get the credit flowing again. And he's made it very clear that he is going to do what is necessary to get us out of this economic hole."
Summers said Mr. Obama has gotten a "terrific" response from lawmakers over the plan, and that in addition to funding "shovel-ready" projects, state and local governments would be supported and thereby prevent lay-offs of teachers, policemen and other essential personnel.
"This really is, we believe, what the economy needs," he said. "It provides the jobs that it's so obvious that people need. You know, we had the worst year ever in terms of job loss last year. But it's doing the work that the country needs to do, whether it's roads, whether it's energy, whether it's health care."
Summers also expects Obama's choice for Treasury Secretary, Timothy Geithner, to handle financial bailout funds in a much different way than has Henry Paulson, who has faced withering criticism over a lack of transparency and seeming ineffectualness from the disbursement - so far - of about 350 billion taxpayer dollars.
"After all the difficulties that that program has had, all the money that's been given away where people haven't seen much benefit, … the president-elect and all of us on the economic team led by Treasury Secretary Geithner are going to do this in a very different way. The focus isn't going to be on the needs of banks. It's going to be on the needs of the economy for credit.
"What's not going to happen is that funds are going to be paid out to managers that instead could be supporting increased lending. What's not going to happen is that funds that could be supporting increased lending are being used to finance acquisitions that may serve a bank, but don't serve the country."
Summers was wary of the prospects for the economy in the early days of Obama's term. "There's no question, almost no question, that the economy is going to decline for some time to come, … And the next months are almost certainly going to be difficult."
But he does not think unemployment will reach ten percent.
"Frankly what's important about the president's program here is that it is going to contain what would otherwise be just a vicious cycle," he said. "People spend less, therefore others earn less, therefore they spend less … We're going on contain this problem. The president is going to do whatever it takes to achieve that objective.
Notably, Summers refused to answer questions from Schieffer about whether Obama would fulfill his campaign promise of repealing President Bush's tax cuts for the wealthiest Americans, postpone a repeal, or simply let the law stand (as it is due to expire at the end of 2010).
"Look, our overall focus is going to be on increasing spending," he said. "The Bush tax cuts, as you know, Bob, are scheduled to expire in two years, in any event, just by law. Just what the timing will be is something that is going to be worked out going forward. ... The focus is really going to be on moving this economy forward by putting money in the hands of the people who need it the most, America's middle class families."
"Well, let me get back to the question," Scheiffer said. "Are you going to leave those tax cuts in place, or are you going to let [them] expire?"
"That's going to be something that'll get worked out in the legislative process. The focus right now for the president, I believe the focus for all Americans, should be on how we're going to get this economy going. And that really goes to the question of what we're going to do for middle class families."
Also on the program, Slate.com's chief political correspondent John Dickerson (left) discussed Mr. Obama's inaugural address, and said what the new president needs to accomplish.
"Yesterday on his train ride to Washington, he talked about a new prosperity," he said. "He's going to talk about a new era of responsibility. But then he's going to rely on old truths, because he wants to create this sense of unity that he created in his campaign, this idea that we see ourselves in each other.
"Why does he have to do this? Because he's going to ask some tough things of the American people. And only by creating this notion that we're all in it together can he get people to work in their local communities to bring about change, but also to take the hits that he's going to offer them to get out of this economic mess we're in. He's going to ask for some sacrifice. And only if everybody feels like they're in it together are they going to give up a little."
Georgetown University professor Michael Eric Dyson agreed. "He might have to facilitate a transition from 'Yes, we can' to 'Now we must.' And I think that what he can do, of course, is to continue to appeal to the spirit of the American people to come together.
"The fact that he's the first African-American president may not be as important as the enormous debt and crisis that he inherits, and the fact that, as a community organizer, he is now in the White House, using the bully pulpit to forge connections among communities that he was used to doing as a community organizer."
Dyson (left) believes President Obama can "wield eloquence as a weapon against some of the cynicism and despair that's been out there. Just the change in tone will be a significant achievement."
Dickerson noted that in Martin Luther King Jr.'s famous speech on the steps of the Lincoln Memorial - within sight of the Capitol - he talked about "the fierce urgency of now."
"Well, that was a famous line from Obama throughout this campaign. So you have all of these historical echoes going on in this moment that I'm sure Obama will know how to ping when he's talking."
Read the full "Face the Nation" transcript here.
By CBSNews.com producer David Morgan.