President-elect Ronald Reagan's 1981 economic program is playing to unusually mixed reviews in this traditional Republican stronghold.
Although Peorians solidly backed the GOP winner over President Carter in the November election, interviews with dozens of consumers and business leaders show they're still relatively glum about the outlook for the next 12 months.
Even the optimists here are convinced the economy will get visibly worse before it gets better -- and won't actually pick up until nearly 1982. Most remain skeptical about Reagan's plan for a 10 percent income-tax cut.
More important, both families and businesses here have firmly retrenched, and don't envision any major new spending on big-ticket items for the remainder of 1981.
And, although few seem to agree with some Reagan aides' assessments that the nation is nearing an "economic Dunkirk," they have lowered their expectations -- both for the short- and longer-term.
A typical appraisal comes from Dennis Remington, a 37-year-old switchboard installer: "I think we all agree we have to take less. I don't think things would be much better no matter who was in office."
The interviews -- although strictly informal and not intended to serve as a statistical sampling -- are revealing, because if Reagan hopes to muster new enthusiasm anywhere, this ought to be the place.
Peoria historically has proved a sure-fire applause-getter for Republicans. Whenever a Nixon administration proposal bombed in Washington, White House aides would assure the president, "Don't worry -- it'll play in Peoria."
And small wonder.Unabashedly pro-GOP Peorians gave Nixon a lopsided 64.9 percent of their votes in 1972. More lackluster candidate Gerald R. Ford still garnered 57.3 percent in 1976. And Reagan took 62.8 percent in November.
The Peoria area also is home to Rep. Robert H. Michel (R-Ill.), the new House minority leader; the former Joy Dirksen, wife of Senate majority leader Howard H. Baker (R-Tenn.); and Eureka College, Reagan's alma mater.
"You can't get much more Republican than that," boasts one local GOP partisan.
Still, Peorians seem to be anticipating the inaugural next week with the same supportive-but-resigned mood that theater audiences exhibit when the management announces that an understudy will substitute for the lead:
They're hoping Reagan is a hit, but they're not really expecting very much.
"It's sort of a wait-and-see posture," say Dorothy Sinclair, a GOP citt councilwoman. "Most people are very cautious -- not because of Reagan per se, but because they hesitate to get too optimistic about government."
"So far, I'm not discouraged," say Charleen Bowe, president of a small mechanical equipment-manufacturing firm here, in another frequently heard assessment. "I'm not totally confident but I'm not discouraged, either."
As in much of the nation, the absence of much real enthusiasm here stems in part from the local economic situation. For the first time in recent memory, Peoria is in the middle of a genuine slump -- and it's threatening to get worse.
Unlike the 1973-75 recession, when the city escaped without being visibly hurt, the economy this time has been hard-hit. Layoffs have been heavy, and the local unemployment rate stands at 8.4 percent. Approximately 14,000 persons are out of jobs.
Moreover, the recent sharp rise in interest rates -- which already has taken its toll on some businesses -- is threatening to force many smaller firms to close unless conditions improve dramatically in the next several weeks.
Don Hunt, loan officer at one of the city's leading banks, predicts "a rash of closings in the first quarter" unless interest rates decline quickly. "Many are saying, '1982 is so far away I don't think I can make it,'" Hunt says.
Peoria's troubles began in October 1979, with a strike by employees of the Caterpillar Tractor Co., the city's dominant employer. The walkout -- the company's first in almost 30 years -- lasted through the following December.
Then came a series of sizable layoffs by Caterpillar and Keystone Consolidated Industries, a large specialty steel producer. At the same time, a third big employer, Hiram Walker distillers, announced it was moving out.
To top it off, the new surge in interest rates has blunted recovery in the hard-hit housing and automobile-sales markets here. And many of Caterpillar's local suppliers have been stretched about as far as they can go. c
"My own business is at an all-time low in terms of cash flow and profits," says equipment-manufacturer Bowe, for whom Caterpillar is the major customer. s"It's going to take six to eight month before I can pull out."
The result has been a continuous slump in the local economy, without the fleeting July-through-September "recovery" that brightened prospects briefly in many parts of the country.
Overtime has almost disappeared in most of Peoria's industrial plants -- a major comedown in a community where time-and-a-half Saturdays had been a staple for years. A few firms even have cut back to a four-day week.
Although Caterpillar and Keystone workers have been saved from disaster by special union unemployment benefits that assure them 85 percnet of their normal wages, the impact nevertheless has crimped spending for anything but basics.
Lee Todd, a 59-year-old steelworker with 32 years' seniority, last year suffered a $7,000-a-year pay cut -- to $25,000 -- as a result of a reduced workweek. "You just adjust yourself accordingly," he shrugs. "You learn to do without."
Like Todd, who traditionally has voted Republican, most Peorians are favorably disposed to the new administration. The consensus here is that Jimmy Carter was "a bungler" and that Reagan at least "is on the right track."
"Even change for change's sake will be for the better," says Earl Cunion, a local department-store executive. Jean Polk, 40, a black Peoria schoolteacher, agrees: "I want to kind of be optimistic about Reagan."
That established, however, Peorians' enthusiasm for the new administration falls decidedly short of open euphoria:
In the first place, although Peorians generally like Reagan's conservative campaign speeches, most contend they simply haven't seen enough during the transition to come to any firm assessments about the new administration.
"It's just not clear yet what the outcome will be," says Richard Hodel, a local home builder who favored Reagan over Carter. Steve Anderson, a 34-year-old Caterpillar worker, agrees: "I'm going to have to wait and see."
Second, even those who are persuaded that the administration will perform will seem convinced that it will take time to turn the economy around -- if, indeed, it can be done at all.
Louise Todd, wife of the Keystone steelworker, believes that "President Carter has left us in such a mess that you aren't going to be able to tell any different for two years or so."
And David Conner, another of the city's key bankers, questions whether it's ever really "possible for the president to be more than a role model and coordinator" -- no matter who is in office.
More important, the interviews showed there is broad-scale skepticism here over the centerpiece of Reagan's 1981 economic program -- his proposal for a 10 percent across-the-board cut in federal income taxes.
Expressing a view shared widely even among Reagan supporters, William Pope, a 63-year-old retired engineer, declares flatly, "I don't want to see it until spending can be cut."
"If it comes about, it'll be great," says Sandy Remington, wife of the switchboard installer and herself a secretary, "but I don't think they can do it. You can't give away 10 percent of your income and still pay the bills."
Peorians also seem solidly opposed to any rollback of this month's sharp increase in Social Security payroll taxes -- despite the visible reduction in take-home pay that hit Americans on Jan 1.
There's broad agreement here with Louise Todd's view that the system's problems stem mainly from "mismanagement over the years." Correct that, she asserts, and the Social Security trust fund will be in good shape.
Peorians seem to agree almost to a person that what the new administration ought to do first is cut "wasteful programs" -- foreign aid comes up most often -- pull the budget into line and bring interest rates back down.
And they seem to support almost unanimously the president-elect's plans to boost defense spending sharply. (Like others interviewed in earlier trips, Peorians put the economy second to concern over declining U.S. prestige.)
Peorians -- and Americans generally -- seem firmly convinced that a large part of the total federal budget is being thrown away on "wasteful" spending. And they repeatedly complain that congressional salaries are too high.
Finally, residents here seem to have little truck for Reagan advisers' pronouncements that the U.S. is facing "an economic Dunkirk" -- or suggestions by the president-elect's advisers that he declare an "economic emergency."
"That's one thing Carter said that I agree with," says Keystone worker Todd: "Things are bad enough as it is. Why send out another SOS?" Echoes Pope, an ardent conservative: "To declare an emergency would be a mistake."
To be sure, not everyone in Peoria is glad to see the Carter administration leave office. The city has a small -- although often overwhelmed -- contingent of liberals. And black Peorians are wary of the Reagan stance on some key issues.
John H. Gwynn Jr., president of the local chapter of the National Association for the Advancement of Colored People, warns that blacks here still are "skeptical" about Reagan on busing and affirmative-action programs.
"It's not hostility," Gwynn says, "but the trust is not there."
Pam Evenson, a 26-year-old insurance adjuster, says she's still fearful the new administration might go too far. "I'm not as scared as I was when he was running, though," she says. "I guess I'm hoping for the best."
Nevertheless, most Peorians still are looking forward to the change in administrations. Interviews show that business leaders here join their counterparts in other cities in expecting a "new, improved climate."
And the Republican-dominated City Council delightedly has postponed a bond sale for a locally unpopular $40 million river-cleanup project pending a ruling by the new -- and presumably Reaganized -- Environmental Protection Agency.
Asserts a defiant Councilwoman Sinclair: "We are questioning both the amount of pollution and the effectiveness of the plan that was insisted upon by the Carter administration."
The comments of the several dozen Peorians interviewed also confirmed some profound changes in Americans' thinking about long-term economic issues -- brought on by the economic shocks of the past decade:
The old feeling that the sky's the limit for the American family has been blunted sharply during the past several months -- a sign that many families simply have given up and resigned themselves to long-term inflation.
"Within the last year is when it hit me," Sandy Remington mused at one point. "Even up to a couple of years ago, I felt anything we worked for we could have. I don't believe that now."
Both workers and union leaders seemed untroubled by the perception that Reagan's new thrust might result primarily in more advantages for business. Most said they felt business needed more help "because that's where the jobs are."
Some union leaders even have concluded that because of the touchy economic situation, they will be moderating their demands at the bargaining table this year.
"Right now, the company is having some financial difficulties, and the feeling is we're going to have to make some sacrifices in order to ensure our job," says Charles Kalb, president of the Independent Steel Workers' Alliance.
"We'll be trying for a simple one-year extension of our present contract," Kalb says. "It's something we don't like to do, but this year we feel it can't be helped." The union deals with the ailing Keystone company.
Many younger workers -- those under 35 -- are all but resigned to the notion that they won't be receiving any retirement benefits from the Social Security system because they're convinced it will run out of funds before they're 65.
Admittedly, for all the dampened spirits here, Peoria is not quite the outright disaster area that communities such as Rockford, Ill.; Flint, Mich.; or Lima, Ohio were earlier this year.
To begin with, income levels are well above average here, so that workers who suffer overtime cuts can still make it through -- albeit with some scrimping. And interviews show not all of those laid off were that hard hit:
Loren Hasty, a 31-year-old steelworker, says his $269 a week in combined jobless pay and federal trade-adjustment assistance enabled him to survive an eight-month layoff "without missing a single house payment."
"I was only taking home $270 a week when I was working, by the time the government got through taking taxes out," Hasty says. "We had to cut out buying stuff we didn't need. But it really wasn't all that bad."
Ironically, for all the talk of layoffs, local job analysts, both goverment and private, assert that there are plenty of good jobs available, if people want to take the time to look for them.
Fritz Alexander, a Peoria employment counselor, rattles off dozens of "excellent positions" he's having difficulty filling, from $11,000-a-year secretary's slots to $35,000-and-up executives' billets.
"A lot of people are afraid to change because of the economic situation," Alexander says, "but in some cases, people just are not looking for employment."
Robert E. Schmidt, an analyst with the state Job Service, blames generous union jobless benefits for the fact that there are so many unfilled slots. Payments are so high, he says, "there's no need to go out and get a job."
Still, the combination of inflation and the cutback in overtime has left most Peorians cautious. Although retailers here report pre-Christmas sales were unexpectedly robust, they don't expect a real pickup for several months.
Like Americans everywhere, many Peorians continued to spend freely throughout 1979, despite an erosion of their purchasing power, then cut back rather abruptly after President Carter imposed economy-wide credit controls last March 14.
Although loan delinquency rates are down -- and debt burdens are better-balanced than they were then -- lenders here report they're having to "work harder" now to keep accounts up to date.
And Mayneen Dykstra, a local credit counselor, says pleas from Peorians who've overextended and gotten into deep financial trouble have jumped sharply in recent months -- with many of the callers in the $30,000-to-$40,000 brackets.
And although Caterpillar has begun offering overtime again in some of its plants, company officials remain "guarded" about the future. The firm is negotiating for a big Soviet equipment contract, but it's not yet in the bag.
As a result, consumers generally are bearish, with few plans to buy big-ticket items, such as autos and housing. Also looming in the picture: jobless benefits may soon run out for many of Peoria's unemployed.
To many local analysts, the outlook both here and across the nation may well lie in banker David Connor's admonition that "the most important economic factor in the first quarter is going to be how the Reagan administration is perceived.
"The mood is very much like that of Elize Doolittle -- people are tired of words and they want action," Connors sums up. "If the perception is one of steadiness, people will start coming out from under the rocks."
Meanwhile, Peorians are entering 1981 with at least one characteristic not widely shared by other Americans: They're tired of having their temperature taken by reporters and pollsters.
"Peoria is well past the old vaudeville days when things 'played in Peoria,'" lectures Councilwoman Sinclair, deftly avoiding any reference to the Nixon administration's reapplication of the phrase to modern politics.
And so it is.