Fix the Subways in Hours?

Donald Trump famously said he could end the war in Ukraine in 24 hours, yet the war is still raging more than two months after he took office. In the same way, Transportation Secretary Sean Duffy recently said that New York City could solve all of the problems with its subway system “in hours, not days” (he generously allowed the city 36 hours instead of just 24) if it just had the will to do so. Note that Trump promised to stop the war himself while Duffy is demanding that someone else save the subways.

Photo by EmperorOfNYC.

This is the level of naïveté that we’ve come to expect from the Trump administration. New York City subways have problems with fare evasion, homelessness, drugs, property crime, vandalism, and violent crime that stretch across 472 stations, 850 miles of track, and nearly 6,800 subway cars. The idea that it could solve all of these problems by simply flooding the system with police for 36 hours is so ludicrous it isn’t even funny.

Even if those problems were solved, they are really just symptoms of the real problem, which is that transit agencies have no incentive to operate efficiently or even to attract riders. Instead, all of their incentives are to increase costs as much as possible while doing as little work as possible. These perverse incentives are not the fault of the New York MTA or any other transit agency but are due the federal government, which began throwing money at transit in the 1960s and responds to every transportation issue by increasing the flow of money.

I understand why Trump appointed non-experts to run his departments and agencies. You can’t fight the Deep State by putting members of the Deep State in charge. At the same time, the people fighting the Deep State need to understand the real problems or they are just going to flounder around.

Last November, I urged Musk to take a scalpel to the federal budget, cutting wasteful programs and making sure such cuts are sustainable by combining them with new policies that will give government agencies incentives to operate efficiently. Instead of a scalpel, he is using a chainsaw, and the cuts he is making are not going to solve the government’s problems.

The chainsaw approach makes sense in some cases and in others it is wildly destructive. The federal government consists of 15 departments and 40-some independent agencies. Of the departments, Defense, Justice, State, Treasury, and Veterans Affairs form the core of the federal government, providing essential services that only the federal government can do.

Too much of the rest is pork, patronage, and waste. In particular, most of the departments of Health & Human Services, Housing & Urban Development, Transportation, and Education are pass-through agencies, sending federal dollars to state and local governments for programs they should or could fund themselves.

Pass-through money is democracy-destroying. Almost every state constitution requires the state to balance its budget, and this imposes a discipline on legislators and bureaucrats to only fund the things the states really need. But pass-through money from federal deficit spending allows state agencies to wildly spend on projects and programs that their states neither need nor want.

Agriculture, Commerce, and Labor exist mainly to benefit special-interest groups. Agriculture, for example, primarily exists to keep food prices high so farmers can be profitable.

Most Interior agencies, the Forest Service, much of Energy, the Federal Aviation Administration, and the National Weather Service, along with such independent agencies as Amtrak, the Postal Service, and the Tennessee Valley Authority, manage resources or provide services that can produce revenues but often are subsidized to benefit special interest groups. Homeland security and some agencies in the Department of Justice, such as the BATF and DEA, mainly do things that ought to be done by local governments.

These different kinds of agencies demand different kinds of reforms. Some, such as the five core departments, should be given new incentives to be efficient. The pass-through agencies along with Homeland Security should be devolved to the states. Revenue-producing agencies should be funded exclusively out of their own receipts, or better yet given incentives to produce a profit for the federal government. The special-interest agencies should be eliminated.

There may be a few programs outside of the five core departments whose work crosses state lines and thus deserves a federal presence. The Environmental Protection Agency’s nationwide air and water quality standards truly helped clean the environment. But such agencies often overstep their bounds, imposing draconian rules that produce little benefit. Why does there have to be a Federal Emergency Management Agency doing things that states should do? Why do we still have a Selective Service System when there hasn’t been a draft since 1972?

The Trump administration should have taken a different approach to each of these types of agencies. Chainsaw the pass-through and special-interest agencies. Marketize the revenue-producing agencies. Devolve many of the remaining agencies. Incentivize the core activities of the federal government.

Unfortunately, Trump and Musk are not making these distinctions between programs that are truly federal and those that could or should be handled by state or local governments. In applying chainsaws to all departments, they are potentially weakening the ones that are truly federal even as they give their opponents reasons to stir up opposition. As a result, unless they change direction soon, many of the benefits they could have achieved will never happen.