There are often debates about which form of transportation is subsidized, and which form of transportation pays for itself. The fact of the matter is that no form of transportation really pays for itself. Passenger fares cover only a portion of public transit operating costs depending on the system and its type of service. So-called highway "user fees" also fall short of covering the costs of the road and highway network. A 1994 U.S. Congressional study found that highway-related taxes only covered between 53 percent and 68 percent of the total cost of highway programs when factoring in the external costs of road congestion, accidents and injuries, highway patrols, and air quality impacts to public health. Airlines also rely on subsidies in the form of airport construction and maintenance, airport access by off-site transportation improvements, fuel subsidies, and impose massive external costs in the form of noise and air pollution. Amtrak actually covers a majority of its operating costs through passenger fares, but will face an uphill battle when attempting to become financially self-sufficient in 2003 as mandated by Congress.

The reality is that the subsidy debate is often counterproductive. There are public transit proposals that don't merit any public subsidy because they don't make sense, there are highway projects that would prove to be a waste of money if built, and there are even toll road facilities that never pay for themselves as promised and need an eventual bailout with public financing. A far better test for whether transportation investments are worthwhile is the development and implementation of a broad range of performance measures and cost-effectiveness criteria.