With the continuing growth in the amount of backbone traffic, improving the cost-effectiveness and ensuring survivability of the underlying optical networks are very important problems facing network service providers today. In this paper, we propose a bandwidth squeezed restoration (BSR) scheme in our recently proposed spectrum-sliced elastic optical path network (SLICE). The proposed BSR takes advantage of elastic bandwidth variation in the optical paths of SLICE. It enables spectrally efficient and highly survivable network recovery for best-effort traffic as well as bandwidth guaranteed traffic, while satisfying the service level specifications required from the client layer networks. We discuss the necessary interworking architectures between the optical path layer and client layer in the BSR in SLICE. We also present a control framework that achieves flexible bandwidth assignment as well as BSR of optical paths in SLICE. Finally, we describe an implementation example of a control plane using generalized multi-protocol label switching (GMPLS).