Although the current program of federal financial assistance for urban mass transportation was established in a later era, during the administration of President Franklin D. Roosevelt many important transit projects were financed, in part, with resources made available by the Public Works Administration (PWA). This was not a transit assistance program, per se, but rather a broadly based federal effort to combat the impact of the Great Depression by encouraging investment in a variety of public works. During the Roosevelt Administration such important elements of contemporary transit infrastructure as the State and Dearborn subways in Chicago, and the Sixth Avenue subway in New York, were the recipients of federal assistance.
On July 12, 1954, Vice President Richard Nixon represented his boss, President Eisenhower, at a meeting of the nation’s governors in Lake George, NY. The Vice President told the governors of the administration’s plan to build a new network of coast-to-coast highways, a project that soon came to be called the Interstate Highway System. For its future ground transportation needs, the United States was making a major investment in new roadways … but in very little else.
In fact, the federal government was almost taking an indifferent attitude toward any kind of alternative transportation. In 1958, for example, a law was passed that removed any control state governments previously exercised over petitions railroads might file to abandon various local passenger services. This immediately resulted in the closing down of several important commuter rail services, and many others were perceived as under serious threat.
Many historians cite this law as the single-most important factor in the emergence of a new program of federal financial assistance for mass transportation.
In 1960, a bill was introduced in the Senate that would have provided federal assistance for mass transportation. While it actually passed the Senate, it never emerged from committee in the House of Representatives.
The next year, 1961, saw a new Democratic president in the White House, John Fitzgerald Kennedy. The proposal to establish federal assistance for mass transportation was introduced in the Senate again, this time as part of a larger urban housing bill, and it was enacted into law. President Kennedy signed the Omnibus Housing Act on June 30, 1961 and said that mass transportation is "…a distinctly urban problem and one of the key factors in shaping community development."
The 1961 act did not initiate broad scale federal assistance for mass transportation. It provided $50 million for loans and $25 million—taken out of urban renewal funds—in outright grants for demonstration pilot projects in mass transportation. Said The New York Times: "This is essentially an interim program, pending broader Administration requests next year."
In 1962 President Kennedy sent a major transportation message to Congress. It called for the establishment of a program of federal capital assistance for mass transportation. Said President Kennedy: "To conserve and enhance values in existing urban areas is essential. But at least as important are steps to promote economic efficiency and livability in areas of future development. Our national welfare therefore requires the provision of good urban transportation, with the properly balanced use of private vehicles and modern mass transport to help shape as well as serve urban growth."
President Kennedy never lived to see his idea enacted into law. It was, rather, President Lyndon Johnson who signed the Urban Mass Transportation Act into law on July 9, 1964. The new measure provided $375 million in capital assistance over three years. It passed the House by a vote of 212-to-129 and cleared the Senate 52-41.
This has been the beginning of the program of financial assistance for mass transportation that is today managed and run by the Federal Transit Administration.