The interest-rate spike worked, but at the price of a virtual freeze in new lending to business.

There has been a virtual freeze on American arms transfers since last fall, largely because of the Persian Gulf conflict.

Mr. Dole termed the proposal for a 2 percent increase in Social Security adjustments "less onerous and more reasonable" than the virtual across-the-board freeze that he had previously suggested.

The virtual freeze on high tech shipments to all but the highest priority bases was beginning to tell in more ways than one.

Perhaps the biggest change is that both Congress and the Administration are living under a virtual freeze on new spending because of last year's balanced-budget agreement.

Operators, they said, had placed a virtual freeze on new channels since the regulations were adopted.

Nurses, teachers and others at the bottom end of the wage scale will get rises of no more that 1 per cent- a virtual freeze.

Officials at the affected agencies said he would propose a virtual freeze for the National Science Foundation and a very small increase for the National Institutes of Health.

That taxpayer revolt helped sweep Gov. Whitman into power last year and last spring she imposed a virtual freeze on state education aid.

Mr. Bush will call for a virtual freeze on spending for nondefense discretionary programs.