Averting the MTA's doomsday scenario

Dire, desperate, awful, horrific.

Soon, we’re going to run out of words to describe the Metropolitan Transportation Authority’s financial condition.

So, even as hopes for a deal between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin seemed to fade Thursday evening, the MTA’s very real $12 billion need remains. MTA officials say the authority could run out of money by early next year. Without help, the MTA board is going to have to make tough decisions soon, from layoffs to service cuts.

Long Island Rail Road ridership remains down by more than 70%, and the subways and buses haven’t made real comebacks either, leaving the authority without a key revenue stream. It’s a vicious cycle, because without such funds, the authority won’t be able to maintain service, or woo customers back.

The bleeding won’t stop without the federal government’s help, and the notion that Pelosi and Mnuchin seemed unable to come to a deal that includes adequate state and local funding, including for public transit, is disappointing. Senate Minority Leader Chuck Schumer says the MTA remains a top priority. But his office also says that Senate Majority Leader Mitch McConnell and President Donald Trump remain stumbling blocks, perhaps due to their "bias" against New York.

Rep. Lee Zeldin, however, says he’s spoken with the president about the MTA, and that Trump understands the MTA’s needs. Zeldin suggested a final bill could have "billions" for the MTA, though perhaps not the full ask.

But if a deal doesn’t come, the MTA will need other answers, at least for now.

That’s why the authority is looking to tap into a special pot created by the Federal Reserve. The MTA could borrow up to $2.9 billion more through the Fed’s Municipal Liquidity Facility, a lending tool established in the wake of the pandemic. The MTA first borrowed $451 million through the MLF in August.

But the facility is to expire in December, leaving the MTA with little flexibility.

The Federal Reserve’s Board of Governors — with Mnuchin’s approval — has the ability to change that date and other MLF provisions. It makes sense to extend the deadline, so the MTA and other public entities can develop the best game plan without a looming deadline. The Fed also should consider changing the three-year payback term. It’s clear this crisis won’t end soon — so extending the term a bit might give municipalities and agencies like the MTA a cushion in their comeback attempts.

The MTA is depending on Washington. We’ve said it before, and we’ll say it again: Without New York, and public transit agencies like the MTA and the Port Authority of New York and New Jersey, which also needs federal help, the nation will flounder. If McConnell and Trump want to see a recovery in red states, they need to help blue states like New York.

Get the trains and buses moving, and the rest of the nation will move, too. Stop them, and everything else will come to a screeching halt.

— The editorial board