Summers, in an interview with The Associated Press, indicated that President Clinton was ready for a veto fight with the GOP-controlled Congress over a number of tax relief bills, which the administration believes would cut too deeply into future budget surpluses.

Republicans already have succeeded in getting House approval of a 10-year, $182 billion tax cut that would provide relief for 25 million couples who now pay more than if they were single.

And Senate Majority Leader Trent Lott, R-Miss., has said the Senate soon would take up its own version of the bill as congressional Republicans, still smarting from Clinton's veto of their $792 billion tax cut plan last year, try to force Democrats to accept a parade of smaller tax cuts or vote against tax relief in an election year.

But Summers said: "Excessive tax cuts outside of an overall fiscal framework that assures we are paying down debt and able to meet future obligations would be economically imprudent and could possibly put the economic expansion at risk."

The Clinton administration still believes the better approach is for Congress to adopt the more modest, targeted tax breaks included in the president's 2001 budget, Summers said. Clinton's budget includes $351 billion in tax cuts for low- and middle-income taxpayers, partially offset by $181 million in tax increases, including a 25-cent per pack boost in the cigarette tax.

The GOP tax cuts, Summers said, would spur consumer spending at a time when the economy is already running full tilt and the Federal Reserve has embarked on a series of interest rate increases to slow growth and keep inflation under control.

"This is not a time when it is appropriate to stimulate consumption on a substantial scale," Summers said. He warned the Fed could be forced to boost interest rates even higher, offsetting the benefits of the tax cuts for consumers.

On another tax front, Summers indicated it's important to not let the Internet turn into a tax haven for Web entrepreneurs seeking tax breaks not available to traditional brick-and-mortar stores.

Summers' comments reflect an effort by the administration to find a middle ground between one group, which includes GOP presidential candidate John McCain, who has called for the Internet to be totally tax-free, and state and local government officials who want to tap into revenues being generated by the fastest-growing part of the economy.

"There should not be any penalty taxes on the Internet, but at the same time cyberspace should not become a tax haven that promotes evasion or avoidance of the basic taxes in our system," Summers said.

A Supreme Court decision bars state and local sales taxes from being imposed on Internet sales or more traditional remote sales by catalogue companies if those firms do not have a facility in the state.

The sales tax now accounts for about $150 billion in revenue to states, and proponents of extending sales taxes to the Internet argue that it is unfair to penalize traditional businesses on Main Street while exempting the world of e-commerce.

Summers signaled support for this view and said as an interim step to dealing with the thorny issues involved in imposing sales taxes on consumers nationwide, plans should be studied to harmonize sales taxes among the various states.

In other matters, Summers:

— Declared that the "fundamentals for the American economy remain strong" but cautioned that after such a long period without a recession, a record 107 months, it was important that businesses and consumers guarded against complacency. "If complacency causes consumers or businesses or government to lose sight of the (economic) uncertainties, that can itself become a risk to the expansion."

— Repeated the administration's goal of using some of the projected budget surpluses to pay down debt held by the public.

— Agreed that the ballooning U.S. trade deficit was not sustainable and said one way to help it decline would be to boost the national savings rate so there would be less demand for imported products.

— Maintained that the administration is "watching the oil price situation closely" but believes that oil prices should be set by market forces without government intervention.