"How much do you pay for Metro now?" Transportation Secretary Drew Lewis asked D.C. Mayor Marion Barry.

"About $75 million a year," Barry said.

"And federal aid is another $12 million?"

"That's right," Barry said, "and it would be terrible if we had to make that up."

"It doesn't sound too terrible to me," Lewis said, according to D.C. Transportation Director Thomas Downs. "Why don't you raise fares?" d

That suggestion, which Lewis says was one of several he offered for making up the loss of federal aid, captures the essence of Reagan administration policy toward public transit: The riders and their local governments should pay the full cost of operating buses and trains, with no federal assistance.

Federal aid is appropriate, under administration philosophy, for the replacement of tired bus and rail fleets, but new rail transit systems should be discouraged and the expansion of existing systems should be held in check.

That is a major shift in federal policy from one that encourages the development and operation of local transit systems to one that would force service cutbacks and substantial fare increases. In the case of Metro subway riders, that would mean fare increases of nearly 17 percent by 1985 merely to compensate for the loss of federal operating aid.

Transit lobbyists are mounting a major congressional effort to save the nationwide aid program. Their experience tells them that federal aid, a creation of the Nixon and Ford administrations, has helped restore riders (and confidence) to public transit systems.

Their experience also tells them that sudden, precipitous fare increases have the opposite effect. Both Washington and Baltimore have raised fares dramatically in the last year; both are going to report ridership declines in the 12-month period ending June 30 for the first time in many years.

"There is a danger," said Washington Metro General Manager Richard S. Page, "that public transit will be forced into the same cycle of raising fares, cutting service and losing riders that killed off the private transit systems."

At the same time, transit managers, including Page, have been seeking changes in the federal aid program in the belief that it needs reform, particularly with reference to how the money is divided among cities. They also generally agree that with budgetary pressures coming at all levels of government, transit systems need to find more economical ways to operate.

"transit is due for a good wringing out," said a key U.S. Department of Transportation official. "And we're going to help push that along."

Last year, the federal government spent $1 billion to aid local transit operating budgets, including $50 million for Washington, Baltimore, Norfolk and Richmond. Those four systems carried nearly 1 million passengers a day.

Immediate elimination of that aid, Lewis acknowledged during his confirmation hearings, "would be virtually impossible without shutting down the bulk of the major mass transit systems." So the administration proposed gradually eliminating federal operating aid over a period of years. By 1985, the aid would be gone.

Federal transit aid represents 9.5 percent ($15.2 million) of this year's Washington Metro budget and 26.9 percent ($4.3 million) of the Tidewater Regional Transit (TRT) budget in Norfolk. These and other transit systems can do only three things to make up the loss of that aid, and each has drawbacks:

Raise fares. That could mean an increase in urban automobile traffic as transit ridership drops.

Cut service. Cuts would fall most heavily on late-night and weekend transit, which is frequently underused but also frequently serves poor people who have no other means of moving about.

Increase local or state subsidies. That would mean higher local or state taxes or cuts in other public services, such as schools and police protection.

Local transit managers interviewed in Washington, Baltimore, Norfolk and Richmond think they will have to use a combination of all three.

Take Washington Metro fares, for example.

If, in addition to regularly scheduled increases, Metro also has to cover the loss of federal aid with fares, the base price for riding the subway would jump from 60 cents to $1 by Jan. 1, 1985, and the base bus fare would go from 60 cents to 93 cents, according to preliminary estimates.

If federal aid remained, however, the subway fare would increase to only 90 cents and the bus fare would go to only 82 cents.

In Norfolk, where that $4.3 million in federal aid represents more than one-fourth of the total transit budget, James Echols, TRT's executive director, said, "I just don't know if we can adjust rapidly enough" to a gradual elimination of aid.

TRT held its base bus fare to 35 cents for several years before jumping it to 40 cents in 1979 and to 55 cents this year. In other words, TRT, like Baltimore, Washington and Richmond, already is resorting to Lewis' solution. It is raising fares, but they would have to be raised much higher before those missing millions would be replaced.

"This year, we're going to eliminate any bus trip that is carrying only five to 10 people," said Echols. "There won't be too much public outcry about that. In the following year [when the federal subsidy would go down], we'll have to start eliminating bus trips carrying 20 people.Then we're going to get some public resistance."

Transit managers are also looking to see if simplifying their routes could result in savings. "I think it's a mistake to rely strictly on fare increases and service cuts," said Henry Church, general manager of the Greater Richmond Transit Co. "This gives us an opportunity to restructure the system wih a scalpel rather than a meat ax." Baltimore is also studying the possibility of restructuring routes.

Federal aid for transit has always been controversial, regardless of which party has been in the White House, but it has been clear for years that some subsidy, whether local or federal, is necessary to keep buses on the streets. If the subsidy is 100 percent local, the argument goes, then management will be better and more responsive to what the locality really needs.

Norfolk's Echols agrees in part. "In hindsight," he said, "we didn't do very well with the federal funds we had. The aid went to further subsidize the rider. We got into bad labor agreements on the theory it was free money. . . ." Other critics have said that transit authorities, usually run by political boards, have been slow to tighten management and are inclined to run almost empty buses on routes no private company would continue. Such service may solve political or social problems, but has nothing to do with efficient transportation.

Washington's Page, a former chief of the federal Urban Mass Transportation Administration, does not entirely disagree:

"Yes, we've been outwitted at the bargaining table. Yes, a lot of political service is on the street. Yes, we have not been smart about internal management, such things as data bases, accounting methods, computerized scheduling, maintenance. We have also been plagued with shoddy equipment, a commentary on industry in general.

"We have got to get smart, but that's coming with or without a decision on federal aid."

Page and many others like him believe that, while the federal transit aid program needs overhauling and redefiing, it is a worthy program, with major long-term benefits in energy savings and urban mobility.

Arthur Teele, a labor lawyer from Tallahassee, Fla., with no discernible experience in transit or urban policy, is now chief of the federal Urban Mass Transportation Administration. "The federal government," he said in an interview, "has no theoretical or constitutional basis for being involved" in local transit operating subsidies. Transit, he said, "has got to get off its knees and stop coming to the federal government for everything. . . ."

L. A. (Kim) Kimball, who heads Baltimore's Mass Transit Administration, is worried like everyone else about how the loss of federal aid would affect his riders. He remains basically optimistic about the future of transit, however, because, he said, "There is not any way an urban society has existed without movement by mass."