THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Thursday, December 28, 1995            TAG: 9512280336
SECTION: FRONT                    PAGE: A4   EDITION: FINAL 
SOURCE: BY ROBERT LITTLE, STAFF WRITER 
DATELINE: RICHMOND                           LENGTH: Medium:   56 lines

ALLEN SEES CLINTON AS ``OBSTACLE'' HE SAYS PRESIDENT'S REFUSAL TO SIGN BUDGET COULD COST STATE $548 MILLION OVER 7 YEARS.

Gov. George F. Allen on Wednesday called President Clinton ``an obstacle'' to a sound economy and warned that Clinton's refusal to sign the Republican federal budget could cost Virginia $548 million over the next seven years.

Clinton and Republican leaders of Congress are expected to join negotiations Friday to craft the government's annual operating budget, already months overdue. Regardless of the specifics, Republicans are demanding a balanced budget within seven years.

Citing an estimate from Federal Reserve Chairman Alan Greenspan that a balanced federal budget would lower interest rates 2 percent, the governor accused the president of ignoring the federal budget's impact on state and local governments. The city of Virginia Beach, for example, would save $42 million in interest on public debt by 2002, Allen said. Norfolk: $75 million.

``It's inexcusable to continue with the chaos that is going on up in Washington right now,'' Allen said.

Last week, Allen offered a two-year state budget that abandons some of the more conservative planks in his administration's platform - such as tax cuts and prison construction. The plan upset some right-leaning Republicans, who fear Allen has buckled after failing to shepherd a GOP majority in the legislature last fall.

But regardless of any possible mellowing at home, Allen made clear Wednesday where he sides in the budget debate in Washington: opposite the president.

As congressional and White House aides met Wednesday to renew negotiations to end the federal government's 12-day shutdown, Allen called a news conference at the state Capitol with U.S. Rep. Thomas J. Bliley Jr., R-Richmond, to blast the president on several fronts.

Allen particularly criticized Clinton's threatened veto of a Republican-backed welfare-reform proposal - a move he called ``a disgraceful flip-flop.'' And he accused the president of having warped priorities.

``I find it very nice and interesting that he goes to Dayton, Ohio, to solve the problems of Bosnia,'' Allen said. ``I hope that he would devote and dedicate as much effort and attention . . . to getting after what is clearly one of the most pressing issues facing the people of the United States of America.

``There's an implicit, insulting nature to what he's saying: It's that the only people who care about children, the elderly or anyone else are those in the federal government,'' said Allen.

``Well, the people of Virginia certainly care about our fellow Virginians.'' by CNB