On March 7, Occupy Somerville hosted a fascinating forum with Jeremy Thompson of MassUniting. “Targeting the Most Vulnerable:  How Wall Street is Hurting T Riders (Especially Seniors, Students and the Disabled)”  made  clear exactly who is being forced to bear the brunt of the MBTA’s proposals to slash service and raise fares – and, just as importantly, who is not being asked to pay at all.

After describing the MBTA’s dire fiscal situation ($5.2 billion of debt; $440 million in annual debt service; and a $160 million deficit for the coming year), Thompson outlined the MBTA’s two proposals to balance its budget for next year with a mix of devastating layoffs, service cuts, and fare increases.  Thompson conclusively demonstrated that, under either proposal, it is those who can afford it the least who be asked to pay the most.  For example, under the MBTA’s Scenario 1, the top 8 fare hikes hit seniors, students and the disabled:

Similarly, under the MBTA’s Scenario 2, seniors, students and the disabled will pay the six biggest fare increases. Thompson also noted that the proposed service cuts will disproportionately affect those who either cannot afford a car or are physically unable to drive.

The most illuminating part of Thompson’s presentation was how big Wall Street banks are profiting off the MBTA’s fiscal problems.  As the MBTA’s debt mounted, banks encouraged the T to enter into  “Interest Rate Swaps,” which are essentially bets on whether interest rates will go up or down.  Specifically, the banks offered the MBTA a series of variable rate payments to cover some of its debt payments while the MBTA agreed to pay the banks at a fixed rate.  But variable interest rates have been near 0% since the bailouts of 2008 while the fixed rates that the T pays the banks are locked in at 3% to 5.6%.  As of February, the T was paying the banks, on average, 4.47% interest while getting back just 0.2% for these swaps.  To make matters worse, the MBTA is not allowed to renegotiate these horrible deals unless it pays an early termination fees of $103 million.

As a result of these bad bets, the T is paying the banks $26 million this year and is on the hook for another $287 million through 2031.  Thompson was quick to point out that $26 million wouldn’t come close to closing this year’s deficit, but it’s nothing to sneeze at, either.  By comparison, the drastic fare increases for THE RIDE outlined above will only raise $18.7 million. The money the MBTA is paying these banks is enough to offset THE RIDE fare increases and save weekend service on the E Line and Mattapan trolley and save late night and weekend commuter rail service.

And which banks is the MBTA paying off at the expense of its riders?  The very same banks we bailed out with our tax dollars. Consider:

• The MBTA is losing $9 million a year to UBS on bad swap deals and is on the hook for another $97 million in the future.  UBS received a $77 billion taxpayer bailout.
• The MBTA is losing $8.9 million a year to JPMorgan Chase  on bad swap deals and is on the hook for another $115 million in the future.  JPMorgan Chase received a $100 billion taxpayer bailout.
• The MBTA is losing $8.3 million a year to Deutsche Bank on bad swap deals and is on the hook for another $75 million in the future.  Deutsche Bank  received a $66 billion taxpayer bailout.

While the MBTA is proposing “solutions” that would devastate T-riders, workers, and the environment, they have not, according to Thompson, approached the banks about renegotiating – or canceling – these swaps.  Thompson encouraged Occupiers, as a concrete way to stave off fare hikes and service cuts, to pressure both the MBTA and the banks to “Stop the Swaps.”

After the presentation, attendees split into small groups to discuss possible actions based on what they learned.  All in all, it was an informative evening that should spur some pretty exciting and creative actions in the coming weeks as part of the fight to save the T.

David Knuttunen, Katie Gradowski, Chris Faraone and Betsy Boggia /Photo by Matthew J Shochat

On March 4th, 2012, at 1:30pm, several Occupy Boston, Occupy Newton and Democratic Socialists of America (DSA) gathered at The Democracy Center, located at 45 Mt. Auburn Street near Harvard Square for a panel titled “After Dewey Sq: Where is The Occupy Movement Going in MA?” The panelists included Katie Gradowski, Occupy Boston participant who has worked with City Life Vide Urbana, Chris Faraone, who began his writing career by free-lancing Hip Hop reviews and the Boston Herald before becoming a staff reporter for the Boston Phoenix, where his coverage of the Occupy movement on both coasts resulted in his debut book “99 Nights With The 99%,” and lastly, Betsy Boggia, who helped organize Occupy Natick after having worked with grassroots organizations, political campaigns, local non-profits including Girl’s LEAP Self-Defense, has been a legislative aide for State Senator Cheryl Jacques, and a co-founder of the Greater Boston Chapter of the Million Mom March for sensible gun control. The moderator for the evening was David Knuttunen, who has worked with Occupy Newton, Occupy Boston’s Free School University, Occupy Boston Radio and Boston DSA.

Many of the panelists expressed experiences within and around Occupy as well as offered advice as to what would make Occupy a success in the future. Betsy Boggia had addressed an issue as to why suburban legislators are making are making decisions that only really impact urban areas. Chris Faraone also advised making action at the state/municipal level in order to achieve victories before addressing issues on the federal level due to the large opposition that would be received. Katie Gradowski expressed how occupy can get heard by pushing legislation rather than endorsing any candidates.

The floor had been open to questions from the audience, as one person asked “What difference has Occupy made to these issues?” Varying panelists responded with difference points, such as an example being that Occupy Somerville having pushed an awful lot with the MBTA issues, Unions having more support than before, and how the message of Occupy has engaged new activists.

Clips of Katie Gradowski, Chris Faraone, and Betsy Boggia can be seen here.