They should make pedestrian-only streets in most dense places of Manhattan and use these money to improve public transportation. Even just a few blocks of no cars would make a huge difference for livability of the city center.

There's a large (long time) movement to do this to lower Manhattan, the most public transit connected area in the US (probably North America, definitely up there in the world). It's getting pick up again.

This is already underway

Big agree. Times Square would be a great place to start.