I think it already does. My understanding is that a train every 2.5 minutes (so, 10 minute frequency on two lines) is the absolute max they can get through the downtown stoplights, hence the Blue Line frequency dropping slightly when the Green Line opened in 2014. So I guess it depends on how you define "at capacity" - all the seats being full on a given number of trains per day? All the seats being full and some number of people standing?
FTA defines "at capacity" by calculating (well, the transit authority makes the calculation and submits it to FTA for review) the amount of space per passenger at peak hour and direction. Essentially if you have under 5.7 square feet per passenger at peak, you are considered to be at or approaching maximum capacity, and are eligible for the program.
Don't take these numbers as the gospel, but I did some quick measurements of Metro Transit's vehicles, and estimate that they have about 78 feet by 8.7 feet of passenger space on every train. So 678.6 square feet of passenger space, divided by 5.7 square feet per passenger, would suggest that Metro Transit would need to (1) achieve passenger density of 120 people per train (2) throughout the designated peak hour (3) throughout the downtown trunk to qualify for the program. Or, if you prefer numbers in the aggregate, since Metro Transit runs 12 three-car trains per hour in one direction on the downtown, that means that it would need to average 4,286 riders in the peak hour in the downtown trunk (= (678.6 x 3 x 12)/5.7 ).
Pre-pandemic did Metro Transit already do this? I'm not sure. The cumulative boardings per day at the five downtown trunk stops in Q3 of 2019 was juuuust under 20,000. Without having a better sense of the distribution of these boardings, it's impossible to say, but it's certainly plausible that Metro Transit has hit this capacity metric, or will hit capacity when the SWLRT is complete. Then again, because the capacity metric takes into account travel in a single direction, perhaps not. It's tricky!
In terms of increasing capacity by 10%, the best way Metro Transit could meet this requirement is to explain that running at-grade limits frequencies on both lines to a train every 10 minutes, and a train every 5 minutes in each direction on the downtown trunk. Running underground could improve capacity from 12 trains per peak hour to 16 trains per peak hour (and much higher than that, but then these lines will be limited by signals elsewhere in the system, so 3.75 minute headways in the downtown trunk seems a reasonable goal).
Again though, I'm interested to see what congress will do, because I'm not sure the Core Capacity part of the CIG program is working as intended? Just browsing
the list of current CIG projects and I see only two Core Capacity projects. That seems like too few, there are major core capacity needs across the country. More funding and perhaps a loosened eligibility to allow funding for smoother operations untied to capacity numbers, might be helpful. It may also be important to revise assumptions about peak hour travel if downtown working behavior changes post-pandemic.