• Mr. Steven J. Muehler

Steve Muehler's Plan to Eliminate the Federal Transit Administration

Updated: Apr 23


Called the Urban Mass Transit Administration when created in 1964, the Agency now known as the Federal Transit Administration provides grants to State and Local Governments and Transit Authorities to operate, maintain, and improve transit systems (such as for buses and subways).


The Federal Government has subsidized mass transit since the 1960's, and it began using Federal Gas Tax (user fees) paid by drivers into the Highway Trust Fund ("HTF"), to pay for transit in 1983. The transit diversion within the HTF marks the largest such diversion. The reasons for funding transit were to offer mobility to low-income citizens in metropolitan areas, reduce greenhouse gas emissions from cars, and relieve traffic congestion. Yet transit has failed in all of these areas despite billions of dollars in subsidies over the past few decades. Transit’s use is concentrated in just six cities: Boston, Chicago, New York, Philadelphia, San Francisco, and Washington. Over half of all transit work commuting trips are to these cities, but outside these cities, people choose to travel in automobiles in overwhelming numbers.


The FTA, a Federal Agency, has been subsidizing purely local or regional activities when it grants subsidies for streetcars, subways, and buses. Transit is inherently local, not national, in nature, and it would be more appropriately funded at the local or regional level. Motorists in Montana or Texas should not have to see the gas tax dollars they send to Washington diverted to buses and subways, when they expect to see it spent on road and bridge improvements.

Transit should not be a Federal priority, particularly given current Federal Budget constraints. Under my Administration, we will phase out the Federal Transit Program over five years. It will reduce Federal Funding for transit by one-fifth per year, and simultaneously reduce the FTA’s operating budget by the same amount. Phasing out the program will allow state and local governments the time to determine the level of funding they want to dedicate to transit going forward—if any. It would also give them time to adopt policy changes that improve their transit systems’ cost-effectiveness and performance.


This plan saves $95 BILLION USE over 10 years.


Steve Muehler is the Founder & Managing Member of the Private Placement Markets:

About Mr. Steve Muehler, Founder & Senior Managing Member:

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