Democratic sources say President-elect Barack Obama will name former University President Lawrence H. Summers director of the National Economic Council—essentially the president’s senior economic advisor—according to news reports this weekend.

Once a top contender to be Obama’s Treasury secretary, Summers, who led the Treasury under President Clinton from 1999 to 2001, will be advising the president on both domestic and foreign economic policy.

He will likely be working closely with Obama’s nominee for Treasury secretary, Federal Bank of New York President Timothy F. Geithner, who reportedly maintains an excellent relationship with Summers.

The position is considered to be a stepping stone to the Federal Reserve chairmanship, which is currently held by Ben S. Bernanke ’75.

Richard Zeckhauser, Summers’ close friend and colleague at the Harvard Kennedy School, said that when Bernanke’s term expires in 2010, Obama will likely name Summers to take his place.

“I’d be surprised if he weren’t seriously considered for it,” Zeckhauser said, adding that Summers could also end up in a senior position at the World Bank, where he served as chief economist in the early 1990s.

The selection has created little stir among the liberal groups that had expressed strong opposition to Summers’ possible appointment as Treasury secretary. The National Organization for Women and other women’s groups, for example, had issued sharply-worded statements of protest earlier this month, harking back to Summers’ turbulent tenure as Harvard’s president.

“I’ve heard nothing negative—that doesn’t mean that people haven’t said negative things,” Zeckhauser said. “But public discussion has been overwhelmingly positive and that sort of suggests that the nation is in a difficult situation and we need the best person we can get.”

—JUNE Q. WU