1996 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

8-9-1996

C.K. v. NJ Dept HHS

Precedential or Non-Precedential:

Docket 95-5454

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Recommended Citation

"C.K. v. NJ Dept HHS" (1996). 1996 Decisions. Paper 86.

http://digitalcommons.law.villanova.edu/thirdcircuit_1996/86
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 

 No. 95-5454 

 

 C. K., ON HER OWN BEHALF AND AS GUARDIAN AD LITEM FOR HER 

 BABY S.B. AND HER DAUGHTER J.M.; L. W., ON HER OWN BEHALF 

 AND AS GUARDIAN AD LITEM FOR HER BABY E.W. AND HER SON J.W.; 

 E. P., ON HER OWN BEHALF AND AS GUARDIAN AD LITEM FOR HER 

 BABY I.P. AND HER SON R.P.; E. M., ON HER OWN BEHALF AND AS 

 GUARDIAN AD LITEM FOR HER BABY BOY B.M. AND HER DAUGHTER 

 C.G.; H. K., ON HER OWN BEHALF AND AS GUARDIAN AD LITEM FOR 

 HER BABIES T.H., D.H. AND D.H. AND OTHER SONS S.H. AND J.H.; 

 E. S. AND G. S., ON THEIR OWN BEHALF AND AS GUARDIAN AD LITEM 

 FOR THEIR BABY BOY B.S., SON C.S. AND THEIR DAUGHTER C.S.; 

 M. M., ON HER OWN BEHALF AND AS GUARDIAN FOR HER DAUGHTER 

 A.P. AND HER SON A.R., ON BEHALF OF THEMSELVES AND ALL 

 OTHERS SIMILARLY SITUATED, 

 Appellants 

 v. 

 NEW JERSEY DEPARTMENT OF HEALTH AND HUMAN SERVICES; 

 WILLIAM WALDMAN, COMMISSIONER, NEW JERSEY DEPT. OF HUMAN 

 SERVICES IN HIS OFFICIAL CAPACITY; DONNA SHALALA, SECRETARY, 

 UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; and 

 THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES. 

 

 

 On Appeal from the United States District Court 

 for the District of New Jersey 

 (D.C. Civil Action No. 93-cv-05354) 

 

 Argued June 10, 1996 

 BEFORE: STAPLETON, GREENBERG, and ALDISERT, Circuit Judges 

 (Filed: August 9, 1996) 

 

 Lawrence S. Lustberg 

 Jonathan Romberg 

 Lenora M. Lapidus 

 On behalf of the ACLU-NJ 

 Crummy, Del Deo, Dolan, 

 Griffinger & Vecchione 

 One Riverfront Plaza 

 Newark, NJ 07102-5497 
 Martha F. Davis (argued) 

 Deborah A. Ellis 

 NOW Legal Defense & Education 

 Fund 

 99 Hudson Street - 12th Floor 

 New York, NY 10013

 Melville D. Miller, Jr., 

 President 

 David G. Sciarra 

 Legal Services of New Jersey, 

 Inc. 

 101 Metroplex Drive

 P.O. Box 1357 

 Edison, NJ 08818-1357 

 

 Attorneys for Appellants 

 Joseph L. Yannotti 

 Assistant Attorney General 

 Of Counsel 

 Dennis J. Conklin (argued) 

 Senior Deputy Attorney General 

 Michael J. Haas 

 Senior Deputy Attorney General 

 Todd A. Wigder 

 Deputy Attorney General 

 

 Deborah T. Poritz 

 Attorney General of New Jersey 

 Richard J. Hughes Justice 

 Complex 

 CN 112 

 Trenton, NJ 08625 

 Attorneys for Appellees 

 New Jersey 

Department of Human 

Services and William Waldman, 

 Commissioner 

 John F. Daly (argued) 

 Mark B. Stern 

 Attorneys, Civil Division 

 Department of Justice 

 Faith S. Hochberg 

 United States Attorney 

 Frank W. Hunger 

 Assistant Attorney General 

 Civil Division, Room 7124 

 Department of Justice 

 Washington, DC 20530 

 Attorneys for Appellees 
 United States 

Department of Health and Human Services and Donna 

 Shalala, Secretary 

 Shirley Brandman 

 Kathleen Sullivan 

 The Jerome N. Frank Legal 

 Services Organization 

 Yale Law School 

 127 Wall Street 

 New Haven, CT 06520 

 Lucy Williams 

 Northeastern University 

 School of Law 

 400 Huntington Avenue 

 Boston, MA 

 

 Attorneys for Amici-Curiae 

 Puerto Rican Legal Defense and 

 Education Fund, Society of 

 American Law Teachers, and Wider 

 Opportunities for Women 

 David A. Price 

 Daniel J. Popeo 

 Washington Legal Foundation 

 2009 Massachusetts Ave., N.W. 

 Washington, D.C. 20036 

 Attorneys for Amicus-Curiae 

 Washington Legal Foundation 

 Rand E. Rosenblatt 

 Rutgers University School of Law 

 Fifth & Penn Streets 

 Camden, NJ 08102 

 Attorney for Amici-Curiae 

 Members & Staff of the National 

 Commission for the Protection of 

 Human Subjects of Biomedical and 

 Behavioral Research and The 

 President's Commission for the 

 Study of Ethical Problems in 

 Medicine and Biomedical and 

 Behavioral Research

 Nadine Taub 

 Women's Rights Litigation Clinic 

 15 Washington Street 

 Newark, NJ 07102 

 Judith L. Lichtman 
 Joan Entmacher 

 Susannah Baruch 

 Women's Legal Defense Fund 

 1875 Connecticut Ave., N.W. 

 Suite 710 

 Washington, D.C. 20009 

 Attorneys for Amici-Curiae 

 Women's Legal Defense Fund; 

 Advocates for Youth; American 

 Association of University Women; 

 Catholics for a Free Choice; 

 Center for Reproductive Law & 

 Policy; Feminist Majority 

 Foundation; National Abortion & 

 Reproductive Rights Action 

 League; National Council of 

 Jewish Women, Inc.; National 

 Council of Negro Women, Inc.; 

 National Family Planning & 

 Reproductive Health Association; 

 National Women's Law Center; 

 ProChoice Resource Center, Inc.; 

 Religious Coalition for 

 Reproductive Choice; Right to 

 Choose of New Jersey; and Union 

 of Needletrades, Industrial and 

 Textile Employees, AFL-CIO 

 William H. Mellor, III 

 Clint Bolick 

 Dana Berliner 

 Institute for Justice 

 1001 Pennsylvania Ave., N.W. 

 Suite 200 South 

 Washington, DC 20004-2505 

 Attorneys for Amici-Curiae The 

 American Legislative Exchange 

 Council; The Empowerment Network 

 Foundation; The Independent 

 Women's Forum; Bethsai Townsend; 

 Tomikka Simmons; and Nicole 

 Green 

 Evan A. Davis 

 Marcia L. Narine 

 Yves P. Denize 

 Cleary, Gottlieb, Steen & 

 Hamilton 

 One Liberty Plaza 

 New York, NY 10006

 Attorneys for Amici-Curiae 
 Association for Children of New 

 Jersey; The National 

 Organization for Women (NOW-NJ); 

 American Friends Service 

 Committee; The Lutheran Office 

 of Governmental Ministry in New 

 Jersey; The National Association 

 of Social Workers, Inc.; The 

 Child Care Law Center; The Child 

 Welfare League of America; The 

 Food Research and Action Center; 

 and The National Association of 

 Child Advocates 

 William H. Hurd 

 Deputy Attorney General 

 David E. Anderson 

 Chief Deputy Attorney General 

 Craig M. Burshem 

 Assistant Attorney General 

 Siran S. Faulders 

 Senior Assistant Attorney 

 General 

 James S. Gilmore, III 

 Attorney General of the 

 Commonwealth of Virginia 

 900 E. Main Street 

 Richmond, VA 23219

 Attorneys for Amici-Curiae The 

 Commonwealth of Virginia and The 

 States of Alabama, Arizona, 

 California, New York, South 

 Carolina, and Wisconsin 

 

 

 OPINION OF THE COURT 

 

GREENBERG, Circuit Judge. 

 Appellants, residents of New Jersey who currently 

receive welfare funding through the Aid to Families with 

Dependent Children ("AFDC") program, challenge the exercise by 

the Secretary of Health and Human Services ("HHS") of her 

authority pursuant to section 1115 of the Social Security Act, 42 

U.S.C. § 1315(a) ("section 1315(a)"), which permits her to waive 

requirements for state plans under the Act to enable individual 

states to test reforms to their AFDC programs through 

"demonstration projects." Specifically, appellants challenge the 

Secretary's grant of waivers to the State of New Jersey in July 

1992 to allow implementation of the state's Family Development 
Program ("FDP") which, inter alia, contains the so-called "Family 

Cap" provision, an amendment to existing state law that 

eliminates the standard increase provided by AFDC for any child 

born to a woman currently receiving AFDC. 

 Appellants claim that the Secretary's waiver was 

invalid and improper, that the FDP violates a number of federal 

statutes and regulations, and that it violates their 

constitutional rights to due process and equal protection. Both 

the appellants and the state and federal appellees moved for 

summary judgment in the district court on all legal issues. The 

court granted summary judgment for appellees on all counts and 

dismissed the complaint with prejudice. C.K. v. Shalala, 883 F. 

Supp. 991 (D.N.J. 1995). This appeal followed. 

 The district court had jurisdiction over this case 

pursuant to 28 U.S.C. §§ 1331 and 1343(3). We have jurisdiction 

under 28 U.S.C. § 1291. Our review of the matter is plenary. 

Helen L. v. DiDario, 46 F.3d 325, 329 (3d Cir. 1995); Mellon 

Bank, N.A. v. Metro Communications, Inc., 945 F.2d 635, 642 (3d 

Cir. 1991). 

 I. FACTUAL BACKGROUND 

 A. STATUTORY BACKGROUND 

 AFDC is a joint federal and state program established 

under Title IV-A of the Social Security Act, 42 U.S.C. § 601 et 

seq., to "enabl[e] each State to furnish financial assistance and 

rehabilitation and other services, as far as practicable under 

the conditions in such State, to needy dependent children and the 

parents or relatives with whom they are living . . . ." 42 

U.S.C. § 601. Under the program, if a state submits an AFDC plan 

that meets the requirements of 42 U.S.C. § 602, the federal 

government will reimburse it for a portion of the benefits it 

provides to aid recipients. In other words, the state will 

receive federal matching funds if it implements an AFDC plan that 

comports fully with the Social Security Act. 

 AFDC is a "scheme of cooperative federalism" in which 

states are given "considerable latitude" in the administration of 

their own programs. King v. Smith, 392 U.S. 309, 316-19, 88 

S.Ct. 2128, 2133-34 (1968). Within the statute itself, Congress 

authorized financial aid: 

 [f]or the purpose of encouraging the care of 

 dependent children in their own homes or in 

 the homes of relatives by enabling each State 

 to furnish financial assistance and 

 rehabilitation and other services, as far as 

 practicable under the conditions in such 

 State, to needy dependent children and the

 parents or relatives with whom they are 

 living to help maintain and strengthen family 

 life and to help such parents or relatives to 

 attain or retain capability for the maximum 

 self-support and personal independence 

 consistent with the maintenance of continuing 

 parental care and protection . . . . 

42 U.S.C. § 601. 
 In 1962, Congress added section 1115 of the Social 

Security Act, now 42 U.S.C. § 1315, in the Public Welfare 

Amendments of 1962, Pub. L. No. 87-543, 76 Stat. 192 (1962). 

Section 1315 provides, in relevant part: 

 In the case of any experimental, pilot, 

 or demonstration project which, in the 

 judgment of the Secretary, is likely to 

 assist in promoting the objectives of 

 subchapter I, X, XIV, XVI, or XIX of this 

 chapter, or Part A or D of subchapter IV of 

 this chapter, in a State or States-- 

 (1) the Secretary may waive 

 compliance with any of the 

 requirements of section 302, 602, 

 654, 1202, 1352, 1382, or 1396a of 

 this title, as the case may be, to 

 the extent and for the period he 

 finds necessary to enable such 

 State or States to carry out such 

 project . . . . 

42 U.S.C. § 1315(a). 

 New Jersey's AFDC program is administered by the 

state's Department of Human Services ("DHS"). On July 1, 1992, 

the New Jersey legislature enacted the Family Development 

Program, now known as the Family Development Act, N.J. Stat. Ann. 

§ 44:10-19 to -33, N.J. Stat. Ann. § 44:10-3.3 to -3.8 (West 

1993). The FDP aims to reduce welfare dependency by, inter alia, 

developing educational and vocational skills. To advance these 

goals, one aspect of the FDP mandates that implementing state and 

county agencies provide individual recipients with contracts 

tailored to the individuals' needs, providing the recipients with 

such services as: 

 job development and placement in full-time

 permanent jobs . . . counseling and 

 vocational assessment; intensive remedial 

 education, including instruction in English- 

 as-a-second language; financial and other 

 assistance for higher education . . .; job

 search assistance; community work experience; 

 employment skills training focused on a 

 specific job; and on-the-job training in an 

 employment setting. 

N.J. Stat. Ann. § 44:10-25(b). The job training and education 

programs created by the FDP for New Jersey's AFDC recipients 

("FDP-JOBS") are intended to serve as New Jersey's education, 

employment and job training programs under 42 U.S.C. § 681. SeeN.J. Stat. 

Ann. § 44:10-19 note. 

 To assist recipients in pursuing their educational and 

vocational goals, the FDP provides specific benefits, such as 

financial assistance for higher education (N.J. Stat. Ann. § 

44:10-25(f)), day care services (N.J. Stat. Ann. § 44:10- 

25(g)(1)), transportation services (N.J. Stat. Ann. § 44:10- 

25(g)(2)), and the extension of Medicaid benefits for up to two 
years for persons who "graduate" from the AFDC program as a 

result of increased earned income (N.J. Stat. Ann. § 44:10- 

25(g)(3)). 

 The provision challenged in this action is section 3.5 

of the chapter, an amendment to then-existing state law that 

eliminates the standard AFDC grant increase (e.g., $102 for a 

second child and $64 for a third child) for any child conceived 

by and born to an AFDC recipient. In legislative findings and 

declarations accompanying the enactment of section 3.5, the New 

Jersey legislature declared that: 

 [t]he welfare system in this State should be 

 designed to promote family stability among

 AFDC recipients by eliminating the incentive 

 to break up families created by AFDC program 

 regulations, which undermines the ability of 

 AFDC-enrolled mothers to achieve economic 

 self-sufficiency and thereby perpetuates 

 their dependence, and that of their children, 

 on welfare. 

N.J. Stat. Ann. § 44:10-3.7(c). 

 Briefly stated, after an initial ten-month grace period 

to provide notice to affected recipients, the FDP denies 

additional benefits to families receiving AFDC upon the birth of 

an additional child conceived while the family was receiving 

AFDC, N.J. Admin. Code tit. 10, § 82-1.11 (1996). A family 

affected by the provision is entitled to retain a larger amount 

of earned income, permitting the family not only to offset the 

denial of additional benefits but to realize an overall increase 

in financial benefits through earnings. See N.J. Stat. Ann. § 

44:10-3.5 and -3.6. 

 Section 3.5 directly conflicts with existing federal 

law. Even though the FDP was enacted as a permanent, statewide 

change to New Jersey's AFDC program, its implementation could not 

occur without the state losing its federal matching funds, absent 

a waiver from the Secretary of HHS. Consequently, following the 

bills' passage, the New Jersey Commissioner of Human Services 

applied to HHS pursuant to 42 U.S.C. § 1315(a) for waivers of the 

conflicting provisions of the federal act. 

 B. THE ADMINISTRATIVE RECORD 

 The administrative record submitted by the federal 

appellees is important for resolution of the legal issues 

involved in the case. Therefore, we will present the contents of 

the record in some detail, as did the district court. 

 In mid-May 1992, HHS Assistant Secretary for Children 

and Families Jo Anne B. Barnhart met with a coalition of welfare 

advocacy groups to receive their commentary on and objections to 

New Jersey's proposed waiver application. App. at 41, 43. 

Following this meeting, on May 19, 1992, Melville D. Miller, 

President of Legal Services of New Jersey, Inc., submitted on 

behalf of his organization and 12 other advocacy groups a 

memorandum to Assistant Secretary Barnhart that detailed certain 

preliminary objections to New Jersey's AFDC waiver request. App. 

at 43-68. 
 On June 5, 1992, DHS submitted its formal application 

to HHS for a waiver under section 1315(a) that would authorize, 

inter alia, the state's implementation of section 3.5 as well as 

the FDP-JOBS program as a five-year experimental project. App. 

at 174. The application included a proposal by the agency that 

described counterproductive results of current welfare policies 

and described how New Jersey's FDP would address these 

deficiencies with the goal of ultimately breaking the "cycle of 

poverty." App. at 175-288. While DHS conceded that depriving 

children of AFDC benefits might seem "harsh," it nevertheless 

justified section 3.5 by stating that its purpose was to 

encourage parents to be responsible in their decision to have 

additional children while receiving welfare. App. at 183-85. 

Indeed, DHS explicitly described the choice to have a child while 

receiving public support as "irresponsible [and] not socially 

desirable." App. at 183. DHS stated that it would offer 

financial incentives to encourage AFDC parents with children born 

after section 3.5 became effective to offset the benefits they 

otherwise would have received through priority for employment and 

training services in FDP-JOBS and through the increase in the 

earned income disregard. App. at 184-85. 

 On July 2, 1992, Assistant Secretary Barnhart submitted 

a memorandum to then-Secretary Louis Sullivan that formally 

recommended approval of New Jersey's waiver request. App. at 40. 

Shortly thereafter, on July 9, 1992, the aforementioned advocacy 

groups sent a letter to Assistant Secretary Barnhart to 

supplement their earlier submission, predicated upon their 

"review of the final application submitted by the State, together 

with [their] review of the implementing regulations for the FDP 

as published in the New Jersey Register . . . ." App. at 36. In 

a reply letter dated August 7, 1992, Assistant Secretary Barnhart 

informed Legal Services of New Jersey that HHS had considered 

their supplemental objections but that the waiver still was 

granted, in part because the New Jersey program "represented a 

new and innovative approach aimed at promoting self-sufficiency 

and reducing long-term welfare dependency." App. at 17. 

 On July 20, 1992, Secretary Sullivan approved the 

waiver to allow the entire FDP to be implemented as a five-year 

project under section 1315(a). App. at 18-35. The waiver 

allowed DHS to implement section 3.5 statewide commencing on 

October 1, 1992. App. at 20-21. Included among the terms and 

conditions of the waiver was the requirement that New Jersey 

conduct a demonstration project whereby families subject to the 

provisions of the FDP would be "randomly assigned to either a 

treatment group whose eligibility will be determined based on FDP 

provisions, or to a nontreatment (or control) group for whom 

eligibility will be determined based on existing program 

provisions." App. at 21. DHS was permitted to phase in FDPJOBS, first in Essex, Hudson, and Camden counties, and then in 

the remaining 18 counties of the state according to a DHSsponsored schedule, but "by no later than June 1995." App. at 

22. DHS adopted regulations to implement the FDP on September 

21, 1992. 24 N.J. Reg. 3352 (Sept. 21, 1992). The regulations 

became operative on October 1, 1992, and provide that every child 
born after August 1, 1993, to a parent receiving AFDC for any 

month within the ten months preceding the birth of the child 

"shall be excluded from the eligible unit" and the parent "shall 

not be entitled to incrementally increased AFDC benefits as a 

result of the birth of a child(ren)." N.J. Admin. Code tit. 10, 

§ 82-1.11(a). The only exception to section 3.5's mandate is for 

the children of new AFDC applicants that are born within ten 

months of their families' application for benefits. N.J. Admin. 

Code tit. 10, § 82-1.11(a)(2). 

 II. VALIDITY OF THE HHS WAIVER UNDER THE APA 

 Appellants first challenge the district court's 

decision to uphold the Secretary's grant of the waiver to New 

Jersey under 42 U.S.C. § 1315(a). Appellants claim that the 

Secretary's decision to grant the waiver violated the 

Administrative Procedure Act ("APA") in two ways. First, they 

claim that the Secretary failed to articulate or explain in the 

record how her decision complied with the statutory requirements 

of 42 U.S.C. § 1315(a) and how it addressed the other statutory 

and constitutional issues raised during the administrative 

process. Second, the appellants claim that the Secretary 

exceeded her authority under section 1315(a) by granting a waiver 

that is not likely to assist in promoting the objectives of AFDC, 

is imposed beyond the extent necessary to carry out the project, 

and is not a valid experimental project. 

 We note at the outset that a court, in reviewing 

informal agency action, "is not empowered to substitute its 

judgment for that of the agency." Citizens to Preserve Overton 

Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824 (1971). 

Nor will we presume even to comment upon the wisdom of New 

Jersey's effort at welfare reform. Although our inquiry into the 

propriety of the Secretary's waiver here "is to be searching and 

careful, the ultimate standard of review is a narrow one." Id. 

Because we believe that this narrow standard of review forbids us 

to disturb the Secretary's decision, we will explain the standard 

of review in some detail. 

 The Supreme Court in Overton Park explained the 

contours of judicial review of informal agency action under the 

APA. At issue in that case was the Secretary of Transportation's 

approval of plans to construct a federally-funded interstate 

highway through a city park located near the center of Memphis, 

Tennessee. Two statutes prohibited the Secretary from 

authorizing the use of federal funds to finance the construction 

of highways through public parks absent findings that no 

"feasible and prudent" alternative route existed and that there 

has been "all possible planning to minimize harm" to the park. 

401 U.S. at 405, 91 S.Ct. at 818 (quoting the Department of 

Transportation Act of 1966, as amended, 49 U.S.C. § 1653(f), and 

the Federal-Aid Highway Act of 1968, 23 U.S.C. § 138). The Court 

noted that these statutory provisions were "clear and specific 

directives" to the Secretary, operating as "plain and explicit 

bar[s] to the use of federal funds for construction of highways 

through parks--only the most unusual situations are exempted." 

Id. at 411, 91 S.Ct. at 821. "Despite the clarity of the 
statutory language," id., the Secretary announced his approval of 

the highway project without providing any statement of factual 

findings: "He did not indicate why he believed there were no 

feasible and prudent alternative routes or why design changes 

could not be made to reduce the harm to the park." Id. at 408, 

91 S.Ct. at 819. 

 The Court held that such formal findings were not 

required. "Undoubtedly, review of the Secretary's action is 

hampered by his failure to make such findings, but the absence of 

formal findings does not necessarily require that the case be 

remanded to the Secretary." Id. at 417, 91 S.Ct. at 824. The 

Court noted that "the Secretary's decision is entitled to a 

presumption of regularity," but cautioned that the APA 

nonetheless "require[s] the reviewing court to engage in a 

substantial inquiry." Overton Park, 401 U.S. at 415, 91 S.Ct. at 

823. 

 The parties do not challenge the district court's 

determination that here, as in Overton Park, this "substantial 

inquiry" is pursuant to APA "arbitrary or capricious" review: 

"[A]gency action must be set aside if the action was 'arbitrary, 

capricious, an abuse of discretion, or otherwise not in 

accordance with law' . . . ." Id. at 414, 91 S.Ct. at 822 

(quoting 5 U.S.C. § 706(2)(A)). The APA thus requires a finding 

that the actual choice made was neither arbitrary nor capricious. 

To make this finding, the court must confine its review to "the 

full administrative record that was before the Secretary at the 

time he made his decision," and "consider whether the decision 

was based on a consideration of the relevant factors and whether 

there has been a clear error of judgment." Id. at 420, 416, 91 

S.Ct. at 825, 824. 

 The Supreme Court, subsequent to Overton Park, has made 

it clear that we must remand to the agency "[i]f the record 

before the agency does not support the agency action, if the 

agency has not considered all relevant factors, or if the 

reviewing court simply cannot evaluate the challenged agency 

action on the basis of the record before it." Florida Power & 

Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 1607 

(1985); see also Pension Benefit Guar. Corp. v. LTV Corp., 496 

U.S. 633, 654, 110 S.Ct. 2668, 2680 (1990). "We will, however, 

uphold a decision of less than ideal clarity if the agency's path 

may reasonably be discerned." Motor Vehicle Mfrs. Ass'n v. State 

Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2867 

(1983) (internal quotation marks omitted). 

 The Court's jurisprudence in this area indicates that 

the terms of the enabling statute frame judicial review of 

informal agency action by (1) establishing the scope of the 

agency's authority, and (2) indicating what relevant factors the 

agency must consider in making its decision. In this case, the 

Secretary is authorized to waive compliance with certain 

provisions of the Social Security Act "to the extent and for the 

period he [or she] finds necessary" to enable a state to carry 

out an AFDC demonstration project if, "in the judgment of the 

Secretary, [the project] is likely to assist in promoting the 

objectives" of the AFDC program. 42 U.S.C. § 1315(a). 
 Although here, as in Overton Park, there is "law to 

apply," 401 U.S. at 413, 91 S.Ct. at 822, these statutory 

requirements demand of the administrator far less than those at 

issue in Overton Park. Whereas the administrator in Overton Parkwas 

prohibited from authorizing the construction of the highway 

through the park without first finding that no "feasible and 

prudent" alternative route existed and that there had been "all 

possible planning to minimize harm" to the park, id. at 405, 91 

S.Ct. at 818, the Secretary here was authorized to grant a waiver 

of compliance if she judged that the experiment was "likely to 

assist in promoting the objectives" of the AFDC program. 42 

U.S.C. § 1315(a). As Chief Judge Friendly observed, writing for 

a panel of the Court of Appeals for the Second Circuit in a case 

involving challenges to a section 1315(a) waiver: 

 [C]onsideration of these claims, like those 

 in [Overton Park], takes us into a type of

 judicial review considerably more difficult 

 to define and exercise than traditional 

 review of administrative action. We have 

 here no adversary hearing, no record, no 

 statement of the grounds for the Secretary's 

 action, except as these may be inferred from 

 the papers on which he acted . . . . While 

 we shall follow the guidelines helpfully 

 stated in Overton, so far as applicable, we 

 find . . . merit . . . in the defendants' 

 position that, purely legal issues apart, it 

 is legitimate for an administrator to set a 

 lower threshold for persuasion when he is 

 asked to approve a program that is avowedly 

 experimental and has a fixed termination date 

 than a proposal, like that in Overton Park, 

 which is irreversible. Moreover, Overton 

 Park dealt with a situation where an 

 administrator was required to make two highly 

 specific determinations on the basis of 

 explicit, legislatively prescribed 

 considerations, rather than reach an over-all 

 `judgment'. In saying this we are not 

 insensitive to the impact these projects may 

 have on the lives of thousands of people, 

 many of whom are in `brutal need[.]' 

Aguayo v. Richardson, 473 F.2d 1090, 1103 (2d Cir. 1973) 

(citations and footnotes omitted), cert. denied, 414 U.S. 1146, 

94 S.Ct. 900 (1974). 

 The court in Aguayo stated that "the only limitation 

imposed on the Secretary was that he must judge the project to be 

'likely to assist in promoting the objectives'" of AFDC, and so 

the central question before the court was "whether the Secretary 

had a rational basis" for making that determination. Id. at 1105 

(quoting 42 U.S.C. § 1315(a)). Rejecting the contention that the 

administrative record was inadequate concerning many details of 

the challenged program, the court found that: 
 the material furnished by the State in 

 justifying the programs and applying for 

 approval adequately covered the policy, 

 budgetary and logistical essentials, and the 

 statute--speaking in terms of an otherwise

 unfettered `judgment'--does not require that, 

 before the Secretary approves an experiment, 

 every i must be dotted and every t crossed. 

Id. at 1107. The court concluded: "We are satisfied that the 

materials before the Secretary sufficed for 'a consideration of 

the relevant factors' by him and that there was no 'clear error 

of judgment' on his part." Id. at 1106 (quoting Overton Park, 

401 U.S. at 416, 91 S.Ct. at 824). 

 We find Aguayo persuasive, and agree generally with 

that court's statement of the proper standard of review of 

section 1315(a) waivers under the APA. To resolve the 

appellants' APA challenges, the central question before us is 

whether the record disclosed that the Secretary rationally could 

have determined that (1) New Jersey's program was "likely to 

assist in promoting the objectives" of AFDC, and (2) it was 

necessary to waive compliance to the extent and for the period 

she did to enable New Jersey to carry out its experiment. See 42 

U.S.C. § 1315(a). If our review of the record satisfies us "that 

the materials before the Secretary sufficed for a consideration 

of the relevant factors by [her] and that there was no clear 

error of judgment on [her] part," then we may not disturb the 

Secretary's decision. Aguayo, 473 F.2d at 1106 (internal 

quotation marks omitted). 

 Turning to the appellants' specific APA challenges 

here, the first contention is that the Secretary failed to 

articulate or explain her reasoning in granting the waiver over 

the objections of representatives of the appellants during the 

administrative process. As explained above, however, the mere 

absence of formal findings is not a sufficient basis for reversal 

because the Secretary was not required under the APA or section 

1315(a) to make findings or to explain her decision to grant New 

Jersey's waiver request. See Overton Park, 401 U.S. at 409, 417, 

91 S.Ct. at 820, 824; see also Pension Benefit Guar. Corp. v. LTV 

Corp., 496 U.S. at 654, 110 S.Ct. 2680 (suggesting that the APA, 

by directing a court to ensure that agency action is not 

arbitrary or capricious, functionally requires an agency to "take 

whatever steps it needs" to create a record sufficient to "enable 

the court to evaluate the agency's rationale at the time of 

decision"). Our review is limited to considering whether the 

Secretary's decision to grant the waiver was arbitrary or 

capricious, and we will reverse only "[i]f the record before the 

agency does not support the agency action, if the agency has not 

considered all relevant factors, or if [we] simply cannot 

evaluate the challenged agency action on the basis of the record 

before [us]." Florida Power & Light Co., 470 U.S. at 744, 105 

S.Ct. at 1607. 

 We will consider next whether the Secretary rationally 

could have determined that the FDP was "likely to assist in 
promoting the objectives" of AFDC. As the district court 

correctly noted, Title IV of the Social Security Act expressly 

provides that the purpose of the AFDC program is to "furnish 

financial assistance . . . to needy dependent children and 

[their] parents or relatives . . . to help maintain and 

strengthen family life . . . ." 42 U.S.C. § 601. The statute 

identifies other objectives of the program to include the 

encouragement of "self-support and personal independence," and 

the promotion of "continuing parental care and protection" for 

underprivileged children. Id. 

 The waiver request submitted by New Jersey delineates 

three primary goals of the FDP: (1) breaking the cycle of 

poverty; (2) enhancing the role of individual responsibility; and 

(3) strengthening and reuniting families. App. at 179. As the 

district court found, these aspirations, on their face, conform 

to the purposes of AFDC. C.K. v. Shalala, 883 F. Supp. at 1005. 

The district court relied upon the following material from the 

New Jersey waiver request to support its decision that section 

3.5, in particular, is consistent with the objectives of AFDC: 

 `[o]ne important way the FDP will encourage 

 decision making is to offer parents a choice 

 when they have another child while receiving 

 welfare. A parent will not receive an AFDC 

 benefit increase to take into account an 

 additional child. 

 . . . 

 However, [the FDP] will offer a financial 

 incentive for these parents to work which 

 potentially will more than offset the benefit 

 they would have otherwise received. This 

 incentive will equal the current federal 

 disregards plus the difference between the

 disregards and 50 percent of the monthly 

 payment standard for financial assistance. 

 These cases will also receive priority for

 employment and training services. 

 This may appear harsh, but it is based on the 

 same principle that applies to everyone else 

 in our society. If a person is working and 

 has a baby, that person's salary is not 

 automatically increased. Yet, that is 

 essentially what we are required to do under 

 [current] federal AFDC regulations. We 

 believe that if a person is given a choice, 

 that person will do what is best for the 

 family which, in this case, is work. We can 

 best help others by empowering them to help 

 themselves. The children will continue to be 

 eligible for Medicaid and increased food 

 stamps.' 

Id.; see also app. at 184-85. 
 The district court found that the above statement 

regarding the benefits ceiling imposed upon AFDC recipients, 

along with the provision for the maintenance of Medicaid and food 

stamps benefits for the children, "clearly evince that the 

state's goals are congruous with § 601's stated purpose of 

enabling `parents [or] relatives to attain or retain capability 

for the maximum self-support and personal independence consistent 

with the maintenance of continuing parental care and 

protection.'" C.K. v. Shalala, 883 F. Supp. at 1005 (quoting 42 

U.S.C. § 601). The court further stated that it was patent from 

its examination of the documents generated by HHS that the 

Secretary had reviewed the state's submission regarding section 

3.5 and had judged it likely to promote at the very least the 

AFDC objective of parental self-sufficiency and autonomy. Id. 

The court noted specifically that the terms and conditions 

appended to the Secretary's waiver included provisions for 

evaluation of the FDP to measure if and to what extent section 

3.5 aids AFDC recipients in "slaying their own personal welfare 

dragon." Id. at 1005-06. The court held that "the Secretary's 

judgment that the state's FDP is consistent with the objectives 

of AFDC was predicated on a consideration of the relevant factors 

and was not arbitrary or capricious." Id. at 1006.

 We agree with the district court's decision. It seems 

to us that the stated purposes of the New Jersey program are 

likely to pursue the goals, in the aggregate, of AFDC. The 

appellants, however, claim that the record as it presently exists 

does not enable us to determine whether the Secretary considered 

the broad range of issues surrounding the project. We agree with 

the district court, however, that the record is satisfactory 

insofar as it would allow the Secretary to ascertain whether the 

program pursues the goals of AFDC. 

 In reaching this decision, we agree with the district 

court's analysis of prior cases on this issue. Appellants attack 

the Secretary's decision for failing to address the specific 

objections raised by welfare advocacy groups during the 

administrative review process. They argue that we should remand 

the action to the Secretary for additional consideration of those 

objections in light of Beno v. Shalala, 30 F.3d 1057 (9th Cir. 

1994), which found remand appropriate after determining that the 

record contained essentially no evidence to indicate that the 

Secretary ever took note of the plaintiffs' opposition, but for 

one "conclusory" letter to their counsel. Id. at 1074. However, 

we, like the district court, decline to find in Beno v. Shalala a 

rule that in all cases an administrative record is deficient and 

must be supplemented where it does not contain a specific 

recitation and refutation of objections submitted in opposition 

to a proposed section 1315(a) waiver. See C.K. v. Shalala, 883 

F. Supp. at 1006. Here, the record reflects that HHS officials 

had at least one meeting with the welfare advocacy groups to 

address their concerns about the waiver request. App. at 43. 

The record also contains lengthy objections by the groups in 

opposition to the proposed waiver, in addition to many letters 

submitted by the general public, mostly in opposition to New 

Jersey's reform proposal. 
 We agree with the district court that, given the fact 

that prior to making her decision to grant the waiver the 

Secretary had before her extensive materials as to the purported 

harms the FDP might cause, precedent allows us to give the 

Secretary the benefit of the doubt and conclude that she did 

consider those objections in approving the waiver. C.K. v. 

Shalala, 883 F. Supp. at 1007-08. In this case, as in Aguayo, 

the Secretary had sufficient data, including information and 

arguments addressing all the pertinent issues, to consider the 

factors relevant to her decision. Aguayo, 473 F.2d at 1106. We 

will not assume that the Secretary ignored the materials 

presented in contravention of the state's position simply 

because, in the end, she was not persuaded by them. Thus, we 

believe that the record as it stands is satisfactory insofar as 

it would allow the Secretary to ascertain whether the program 

pursues the goals of the AFDC, and that the Secretary did not 

exceed her authority under section 1315(a) in this regard. 

 However, the appellants also claim that the Secretary 

exceeded her authority under section 1315(a) by granting a waiver 

that was broader than necessary to carry out the project, and 

that is not a valid experimental project. We will address these 

two claims in turn. With respect to the first, the district 

court decided that approval of that portion of the FDP that 

permitted statewide application of section 3.5 while allowing a 

three-year phase-in for the enhanced JOBS program was within the 

Secretary's discretion. Further, the court decided that it was 

not an abuse of discretion for the Secretary to allow New Jersey 

to execute the provision aimed at encouraging employment and 

treating AFDC families throughout the state equally with the 

working poor. C.K. v. Shalala, 883 F. Supp. at 1008. The court 

therefore found that the Secretary's approval of waivers for New 

Jersey's FDP was not arbitrary and capricious and that there had 

been no violation of the APA. Id. 

 In support of their claim that the scope of the waiver 

was unreasonably broad, appellants argue first that the 

Secretary's waiver authorized DHS to impose section 3.5 on every 

AFDC family across the state, except for 3,000 families randomly 

selected for a control group. The waiver directed DHS to gather 

data to study section 3.5's effects on these 3,000 families and 

the 6,000 families placed into an experimental group. Thus, 

appellants argue, HHS allowed the imposition of section 3.5 on 

virtually the entire statewide AFDC population of 143,000 

families, even though it did not require any research data from 

134,000 of them -- a waiver they claim was beyond the extent 

necessary to carry out the project. 

 Next, appellants argue that HHS failed to limit section 

3.5's applicability to the extent necessary for its

implementation by approving it without any exceptions. They note 

that the section makes no exceptions for those who become 

pregnant through rape, incest or failed contraception, or for 

those who decide against abortion for religious, ethical, or 

medical reasons. Further, in their argument for terming section 

3.5 a "Child Exclusion," appellants claim that the section 

completely bars eligible children from receipt of AFDC: 
 [U]nder a family maximum, when the oldest 

 child in a large family becomes too old to

 receive AFDC, the family continues to receive 

 the same level of benefits because the 

 younger children's grants have not been 

 totally rescinded. Under the Child 

 Exclusion, however, when the oldest child 

 becomes too old to receive AFDC, those 

 benefits disappear; the excluded children 

 never receive benefits because their 

 eligibility has been completely eliminated. 

 Similarly, under the family maximum, if a 

 child in a large family is sent to live with 

 a relative, the child can receive AFDC 

 benefits because the child's eligibility was 

 never rescinded. Dandridge [v. Williams],

 397 U.S. 471, 480, 90 S.Ct. 1153, 1159 

 (1970). Under the Child Exclusion an 

 excluded child cannot receive benefits no 

 matter where he or she lives. 

Br. at 34. 

 The federal appellees argue that the broad language of 

section 1315(a) allows both the states and the Secretary wide 

discretion to conduct a variety of experiments and demonstration 

projects. Br. at 24. Thus, they claim that: 

 Although the Secretary certainly has the 

 authority to place limits on a proposed 

 waiver project, and could conceivably abuse 

 her discretion by approving a project of 

 truly excessive scope or duration, plaintiffs 

 lose sight of the proposition that neither

 the states nor the Secretary may be held to 

 `standards of scientific precision' in the

 design and scope of such projects. 

Br. at 24 (citation omitted). With regard to section 3.5's 

applicability state-wide, the federal appellees claim that "the 

Secretary's broad § 1315 waiver authority by no means excludes 

the possibility of a `demonstration' conducted on a state-wide 

basis." Id. at 25. Regarding the appellants' claim that the 

waiver was excessively broad "simply because the Secretary did 

not impose exceptions to the plan's provisions that the State 

itself had not called for," br. at 26, the federal appellees 

state that: 

 This argument loses sight of the basic fact 

 that this was a demonstration project, geared 

 to assessing the efficacy of new approaches 

 to welfare issues. While it may be that some 

 exceptions of the sort plaintiffs suggest 

 might eventually prove to be useful 

 refinements of the approach tested here, the 

 Secretary acted well within her discretion

 under § 1315 in approving this pilot program, 

 as an initial test of these approaches, 
 without such exceptions. 

Id. at 26. 

 We are well aware of our proper deference to the 

Secretary with regard to the issuance of section 1315 waivers. 

However, that deference is not absolute. We also have a duty to 

examine her actions to determine whether they were arbitrary or 

capricious within the meaning of the APA, 5 U.S.C. § 706(2)(A), 

and to examine whether: 

 the agency has relied on factors which 

 Congress has not intended it to consider, 

 entirely failed to consider an important 

 aspect of the problem, offered an explanation 

 for its decision that runs counter to the 

 evidence before the agency, or is so 

 implausible that it could not be ascribed to 

 a difference in view or the product of agency 

 expertise. 

Motor Vehicle Mfrs. Ass'n, 463 U.S. at 43, 103 S.Ct. at 2867. 

 An amicus group has brought it to our attention that, 

in reviewing subsequent waiver requests for provisions similar to 

New Jersey's section 3.5, HHS has required that states include 

exceptions that are absent from New Jersey's law. See br. of 

Puerto Rican Legal Defense and Education Fund, et al. at 30-31 

n.25. The amici claim that on October 12, 1995, Howard Rolston, 

Director of the Office of Planning, Research and Evaluation of 

HHS, wrote in response to Connecticut's waiver request: 

 Further, exceptions to the application of the 

 benefit cap have been required: when the 

 additional child was conceived as a result of 

 incest or sexual assault; for a child who 

 does not reside with his or her parent; and 

 for a child that was conceived in a month the 

 family was not receiving AFDC or during some 

 limited set period following receipt. 

Id. 

 Thus, it seems that the Secretary has required 

exceptions to provisions similar to New Jersey's section 3.5 in 

subsequent waivers under section 1315. We, however, recognize 

that the Secretary, in her discretion, is allowed to change her 

mind over time regarding the wisdom of certain programs. Indeed, 

experiments are supposed to demonstrate the failings or success 

of such programs. Our conviction that the Secretary truly 

considered the objections presented to her by the appellants' 

representatives in the summer of 1992 thus remains unshaken. 

Accordingly, we agree with the position of the appellees that it 

is within the Secretary's discretion to determine the wisdom of 

welfare reform programs in a piecemeal fashion. She need not 

have included the exceptions to the workings of New Jersey's 

provision that she later required of Connecticut's program and 

she legally is allowed to change her mind. Our inquiry is 

limited to whether the Secretary's actions in defining the scope 

of New Jersey's waiver were arbitrary or capricious. Since we 

cannot so conclude, we will affirm the decision of the district 

court that the waivers did not violate the APA. 
 The appellants' final APA-based argument is that 

section 3.5 is not a valid experimental project because it is not 

likely to yield useful information, and that the Secretary 

therefore acted arbitrarily or capriciously in authorizing it. 

Br. at 27. The appellants rely on Beno v. Shalala for the 

proposition that "the Secretary must make some judgment that the 

project has a research or a demonstration value" -- that is, "she 

must determine that the project is likely to yield useful 

information or demonstrate a novel approach to program 

administration." 30 F.3d at 1069 (noting that "[a] simple 

benefits cut, which might save money, . . . would not satisfy 

this requirement"). Noting that the record includes no express 

finding on this point (which, as we have explained, does not 

necessarily require reversal), the appellants further assert that 

the Secretary reasonably could not have made the requisite 

determination with respect to section 3.5. The appellants rely 

on studies, cited in the record, indicating no statistically 

significant relationship between AFDC grant size and family size, 

and fault the Secretary for granting the waiver in the absence of 

"any evidence demonstrating a likelihood that a comparison of 

[section 3.5's] treatment and control groups would provided 

useful information showing a correlation between AFDC benefit 

levels and family size." Br. at 27-28. 

 We note first that, by its plain terms, section 1315(a) 

only requires the Secretary to determine that the proposed 

demonstration project is "likely to promote the objectives" of 

the AFDC. Even assuming that the Secretary was required to make 

the more specific determination that section 3.5 was likely to 

yield useful information, however, we believe the record in this 

case would support such a determination. Contrary to the 

appellants' assertions, the stated purpose of section 3.5 was not 

merely to lower fertility rates, but also: 

 to encourage families who have additional 

 children while on AFDC to take advantage of 

 the additional earned income disregard by 

 seeking employment to help cover the child's 

 financial needs. It attempts to break the

 cycle of welfare dependency as the only means 

 of acquiring financial resources. 

App. at 221. The Secretary found that the goals of FDP included 

"break[ing] the cycle of poverty, [and] enhanc[ing] the role of 

individual responsibility." App. at 40. In her August 7, 1992 

letter to a representative of the appellants during review of the 

waiver proposal, Assistant Secretary Barnhart explained that: 

 the Department approved New Jersey's waiver 

 application . . . because it represented a

 new and innovative approach aimed at 

 promoting self-sufficiency and reducing long- 

 term welfare dependency. We will be able to 

 determine whether the project meets its goals 

 through the rigorous evaluation that is 

 required as part of the application's 

 approval. 

App. at 17. The "rigorous evaluation" mandated by the Secretary 
requires New Jersey to evaluate the effects of the FDP not only 

on family structure -- including birth rates -- but also to 

evaluate whether "the FDP help[s] AFDC recipients to achieve 

self-sufficiency" and how "the FDP impact[s] AFDC, Food Stamp, 

and Medicaid participation and costs." App. at 27 (listing 

specific outcome measures). 

 Thus, it is clear that the Secretary expected the FDP, 

including section 3.5, to yield useful information to enable her 

"to determine whether the project meets its goals." App. at 17. 

We cannot say that this expectation, based on the record before 

the Secretary at the time of her decision, was unreasonable. 

Accordingly, even assuming that, prior to granting a section 

1315(a) waiver, the Secretary must "determine that the project is 

likely to yield useful information or demonstrate a novel 

approach to program administration," Beno, 30 F.3d at 1069, we 

cannot conclude that her decision to grant New Jersey's waiver 

request was either arbitrary or capricious. 

 III. STATUTORY ARGUMENTS 

 A. THE HUMAN SUBJECTS PROTECTIONS OF 42 U.S.C. § 3515b 

 42 U.S.C. § 3515b contains safeguards for human 

subjects involved in research projects or experiments conducted 

with funds appropriated to HHS. The statute provides in relevant 

part that no HHS appropriated funds: 

 shall be used to pay for any research program 

 or project or any program, project, or course 

 which is of an experimental nature, or any

 other activity involving human participants, 

 which is determined by the Secretary or a 

 court of competent jurisdiction to present a 

 danger to the physical, mental, or emotional 

 well-being of a participant or subject of 

 such program, project, or course, without the 

 written, informed consent of each participant 

 or subject, or a participant's parents or 

 legal guardian, if such participant or 

 subject is under eighteen years of age. The 

 Secretary shall adopt appropriate regulations 

 respecting this section. 

42 U.S.C. § 3515b. The appellants contend, as they did in the 

district court, that section 3.5 presents a real and immediate 

danger to themselves and their dependent children because of the 

ceiling that it places on the AFDC funds that they receive. They 

argue that the Secretary approved section 3.5 without first 

determining whether it presented a danger to the recipients and 

their dependents and, consequently, whether the program first 

required the informed consent of each recipient. 

 As the district court noted, the Secretary's position 

is that HHS's present human subject regulations generally exempt 

welfare experiments from review by an Institutional Review Board 

("IRB"). C.K. v. Shalala, 883 F. Supp. at 1009. These 

regulations, located at 45 C.F.R. Part 46, require that HHS 

research on human subjects must include (1) prior review of the 

project by an IRB, 45 C.F.R. §§ 46.107-.115 (1995), and (2) 
informed consent, 45 C.F.R. §§ 46.116-.124. Section 

46.101(b)(5)(i) specifically excludes from these safeguards 

research and demonstration projects designed for "public benefit 

or service programs," "procedures for obtaining benefits or 

services under those programs," and "possible changes in methods 

or levels of payment for benefits or services under those 

programs." 45 C.F.R. § 46.101(b)(5)(i). Thus, the regulations 

provide that, as a general rule, a project that changes or alters 

the amount of benefits received will not present a danger such 

that the informed consent requirement is triggered, but they do 

not foreclose a finding of danger in a specific situation. 

 The Secretary argues that a waiver under 42 U.S.C. § 

1315 by its terms contemplates an estimation in advance of the 

danger(s) posed by a particular experimental project. Comments 

published with HHS regulations promulgated in 1983 justify the 

general exemption for social welfare research as undertakings 

"fundamentally different" from the experiments otherwise within 

the ambit of the statute. 48 Fed. Reg. 9266 (1983). Moreover, 

the Secretary asserts that the comments express the notion that 

benefits programs already are subjected to substantial state and 

federal review such that requiring an "additional layer of review 

for such projects [would be] duplicative and needlessly 

burdensome in light of the substantial review process to which 

they are already subjected by state and federal officials." Id.at 9266. 

 It is clear to us that the Secretary's judgment that 

AFDC demonstration projects involving changes in benefit levels 

need no additional review represents a reasonable construction of 

a regulatory statute adopted by the agency charged with 

enforcement of that statute. New Jersey's change in how it 

allocates AFDC benefits is exactly the kind of "changes in . . . 

levels of payment" addressed by the general exemption from IRB 

review under 45 C.F.R. § 46.101(b)(5)(i). However, we disagree 

with the district court's particular reasoning for holding that 

the Secretary complied with the human subjects research statute. 

That court found that "it is clear that [section 3.5] falls 

within that category of social programs insulated from additional 

review such that the Secretary's failure to comport with the 

dictates of § 3515b is not actionable." C.K. v. Shalala, 883 F. 

Supp. at 1009. We do not agree with the district court that the 

Secretary need not comport with the dictates of section 3515b. 

In contrast, we believe that the "additional layer of review" 

from which HHS exempted public benefits experiments was the 

regulatory requirement of IRB review, not the statutory 

requirement of review for danger. We do believe, however, that 

in the case of waivers under section 1315, the Secretary intended 

that her review for danger be subsumed within her more general 

review of the programs at issue. As we are satisfied that the 

issue was presented to the Secretary by the appellants' 

representatives in their objections to New Jersey's plan, and are 

satisfied that the Secretary considered the issue in her review 

of the waiver, we will affirm the judgment of the district court 

on this point. 

 Appellants also have argued that section 3.5 

constitutes experimentation involving pregnant women and fetuses 
in contravention of HHS regulations that set forth additional 

protections for research, development, and other activities 

involving pregnant women, fetuses, or in vitro fertilization. 45 

C.F.R. § 46.201 et seq. The district court, however, decided 

that section 3.5 "has no effect on the level of benefits received 

by a pregnant woman; moreover, the data to be garnered from the 

program and evaluated by HHS/DHS does not at all implicate issues 

and/or concerns regarding pregnant women and/or fetuses." C.K. 

v. Shalala, 883 F. Supp. at 1012. The court therefore decided 

that section 3.5 is not directed toward, "nor will it measure," 

the effects on the pregnant or the unborn. Id. 

 Appellants argue that section 3.5 "involves" pregnant 

women, which would trigger IRB review and the other protections 

required by Part 46. They claim that the regulations indicate 

that pregnant women need not be the exclusive subjects of the 

experiment, but that experiments simply must "involve" pregnant 

women in order to trigger application of the regulations. 

Moreover, appellants are correct in noting that the 1983 

regulations adopted to exempt human experimentation that involves 

public benefits programs from the requirements of Part 46 

specifically do not apply to experimentation involving pregnant 

women, fetuses, or in vitro fertilization. 45 C.F.R. § 

46.101(i), n.1. Thus, the exemption from IRB review discussed 

above does not apply to New Jersey's program if that program is 

decided to "involve" pregnant women or fetuses. 

 The question for us, then, is whether section 3.5 

involves pregnant women or fetuses within the meaning of 45 

C.F.R. Part 46. More specifically, we must determine whether the 

Secretary considered the possible application of the regulations 

to New Jersey's program as part of her general review under 

section 1315 and ruled out their applicability, or whether she 

failed to consider the regulations' effects at all. This 

question, of course, is distinct from whether statutory 

requirements can be waived, as it instead focuses on whether the 

alleged requirement is applicable in the first place. 

 Welfare advocacy groups did raise the possible 

applicability of the more general regulations applying to 

experimentation involving human research subjects in their 

objections to New Jersey's waiver application, although there is 

no specific reference in the administrative record to the 

possibility that the regulations aimed at experimentation 

involving pregnant women and fetuses might apply to New Jersey's 

program. However, both the general regulations relating to 

experimentation with human research subjects and the specific 

regulations pertaining to pregnant women and fetuses appear in 45 

C.F.R. Part 46, the citation provided by the welfare advocacy 

groups in their objections to the waiver. App. at 60. 

 Again, our standard of review requires that we give the 

Secretary the benefit of the doubt and that we assume she was 

familiar with the structure of the regulations issued by her own 

agency, particularly in light of the fact that welfare advocacy 

groups provided the citation for the more general regulations to 

her. Thus, we find that the Secretary's consideration of the 

regulations pertaining specifically to experimentation involving 
pregnant women and fetuses was subsumed within her review under 

section 1315. Furthermore, we defer to her implicit judgment 

that section 3.5 does not involve pregnant women or fetuses. We 

determine, too, that we also would conclude in a review of the 

matter without deference to the Secretary that section 3.5 does 

not involve pregnant women or fetuses within the meaning of 45 

C.F.R. Part 46. Therefore, we will affirm the judgment of the 

district court on this point. 

 B. THE SOCIAL SECURITY ACT 

 Appellants also challenge section 3.5's validity based 

upon its asserted incompatibility with the Social Security Act. 

 1. Assistance to all Eligible Individuals 

 Section 402 of Title IV of the Social Security Act 

requires that a state AFDC plan must: 

 provide that all individuals wishing to make 

 application for aid to families with 

 dependent children shall have [the] 

 opportunity to do so, and that aid to 

 families with dependent children shall . . . 

 be furnished with reasonable promptness to

 all eligible individuals . . . . 

42 U.S.C. § 602(a)(10)(A). The appellants claim that since 

section 3.5 is a state law that denies AFDC benefits to 

individual children who are eligible for AFDC under federal 

standards, it violates section 602(a)(10)(A). 

 The district court rejected the appellants' claim, 

stating that they had disregarded "one of the central tenets of 

the AFDC program, namely that `eligibility under the AFDC program 

has historically been premised upon the household as the basic 

unit of assistance.'" C.K. v. Shalala, 883 F. Supp. at 1010 

(citations omitted). The court stated that where a household is 

receiving AFDC, all of the individuals within that household are 

receiving it, and that payments to one individual in a family 

generally are viewed as beneficial to the entire family. Id. 

The court thereafter concluded that while appellants had referred 

to section 3.5 as the "Child Exclusion" throughout their papers, 

that appellation is inaccurate: 

 Under New Jersey's program, no child is 

 excluded from benefits; rather, the 

 additional child born to the AFDC recipient 

 household simply partakes of the assistance 

 already received by that household at the 

 same monetary level. Thus, the Family Cap

 here is analogous to the maximum family 

 payment upheld . . . by the Supreme Court in 

 Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 

 1153 (1970). 

Id. The court analogized the New Jersey provision at issue in 

this case to that involved in Dandridge, stating that, like the 

maximum benefits payment in that case, section 3.5 imposes a 

benefits ceiling on the AFDC household. Any additional child 

born while that AFDC family is receiving payments simply will be 

included in the assistance unit and share in the benefits 
accorded the rest of the household. Thus, as in Dandridge, while 

the level of cash assistance flowing to the household will not 

increase with the birth of the additional child, the court found 

that it cannot be said that the additional child is denied 

benefits in toto. Id. Consequently, the district court held 

that there was no violation of section 602(a)(10)(A). Id. at 

1010-11. 

 Appellants argue that, unlike a family maximum, section 

3.5 completely bars particular eligible children from receipt of 

AFDC. They claim that under a family maximum, such as the 

program involved in Dandridge, when the oldest child in a large 

family becomes too old to receive AFDC, the family continues to 

receive the same level of benefits because the younger children's 

grants have not been rescinded totally. Under section 3.5, 

however, appellants argue that when the oldest child becomes too 

old to receive AFDC, those benefits disappear; the excluded 

children never receive benefits because their eligibility has 

been eliminated completely. Further, under the family maximum, 

appellants note, if a child in a large family is sent to live 

with a relative, the child can receive AFDC benefits because the 

child's eligibility never was rescinded. Under section 3.5, 

however, they note that an "excluded child" cannot receive 

benefits no matter where he or she lives. Br. at 34. 

 Earlier in this opinion, we noted that the Secretary 

has required of section 1315 waivers occurring subsequent to New 

Jersey's request that certain exceptions be made in provisions 

similar to section 3.5. Of particular note here is the 

Secretary's requirement of an exception in the case of "a child 

who does not reside with his or her parent." See br. of Puerto 

Rican Legal Defense and Education Fund, et al. at 30-31 n.25; 

discussion supra. As we held there, we note again that it is 

within the Secretary's discretion to determine the wisdom of 

welfare reform programs in a piecemeal fashion. She need not 

have required the exceptions to New Jersey's program that she 

required of later programs. Thus, we agree with the district 

court that the AFDC benefits unit should be viewed as the 

household, and that, in general, much like the family maximum at 

issue in Dandridge, New Jersey's provision therefore does not 

deprive otherwise eligible individuals of benefits in violation 

of section 602(a)(10)(A). 

 There is, however, undeniable tension between the 

Court's conclusion in Dandridge (that, "[s]o long as some aid is 

provided to all eligible families and all eligible children, the 

statute itself is not violated," 397 U.S. at 481, 90 S.Ct. at 

1159), and the potential operation of section 3.5 to deprive an 

otherwise eligible family with dependent children of any AFDC 

benefits -- rather than merely forcing the family to share a 

constant amount of benefits among more family members as in 

Dandridge. If, for example, a caregiver does not qualify for 

additional AFDC benefits himself, and only the affected child 

lives with the caregiver, the otherwise "eligible" family of two 

would receive no AFDC money at all in apparent violation of 

section 602(a)(10)(A). 

 Despite this tension with the Court's language in 
Dandridge, the FDP does not violate section 602(a)(10) because 

the Secretary expressly waived compliance with section 602(a) 

generally in order to allow New Jersey to implement the FDP's 

method for determining the proper amount of assistance, which 

necessarily includes the possibility mentioned above that an 

eligible family will receive zero benefits. 

 In relevant part, the waiver provisions of the Social 

Security Act explicitly provide that "the Secretary may waive 

compliance with any of the requirements of section . . . 602 . . 

. of this title . . . to the extent . . . he [or she] finds 

necessary to enable [the State] . . . to carry out [its] 

project." 42 U.S.C. § 1315(a)(1). Thus, compliance with section 

602(a)(10) is waivable. Moreover, in granting New Jersey's 

waiver request, the Secretary explicitly waived compliance with 

section 602(a) to allow for "Differential Payments -- To allow 

the State to implement different methods for determining the 

amount of assistance for families in the FDP treatment group and 

the control group." App. at 34. An eligible family in the 

"control group" would be paid according to the standard AFDC 

program, and thus always would receive some benefits. An 

otherwise eligible family subject to the FDP, by contrast, always 

will receive the standard amount less the incremental amount due 

for the affected child -- which may work out to be zero if the 

family unit includes no other eligible children, parent or 

caregiver. Such "differential payments" are precisely what the 

Secretary permitted in her general waiver of the contrary 

portions of section 602(a). 

 The general section 602(a) waiver indicates the 

Secretary's intent to allow New Jersey to provide zero additional 

money for an affected child, even if that means that some family 

units may receive no AFDC money at all. The appellants argue 

that the Secretary can waive compliance with section 602(a)(10), 

if at all, only by explicitly referencing subsection (10) because 

payment of benefits to eligible families is at the "heart" of 

AFDC. But the differential payments are at the "heart" of 

section 3.5. Although the Secretary could have cited each 

relevant subsection of section 602(a) specifically in the waiver 

authority document, such specificity was not necessary: the 

waiver provisions clearly indicate the Secretary's intent to 

waive compliance with subsection 602(a)(10) insofar as that 

provision is inconsistent with the zero-additional-benefits 

provisions of the FDP. See Aguayo, 473 F.2d at 1108 (concluding, 

where it was clear that the Secretary intended to waive 

compliance with a particular section, that "[i]t would elevate 

form over substance to issue a temporary injunction against the 

operation of these projects until the Secretary went through the 

formality of adding [the section] to the list of sections 

compliance with which was being waived"). 

 In sum, we hold that the Secretary waived compliance 

with section 602(a)(10) insofar as to allow New Jersey to 

implement the FDP, and accordingly the program does not violate 

that section. We will affirm this decision of the district 

court. 

 2. Equitable Treatment Regulations 
 The appellants next assert that section 3.5 violates 

the principle that a state must treat eligible individuals and 

groups of residents on an equitable basis. HHS regulations 

provide that "eligibility conditions" in a state plan "must not 

exclude individuals or groups on an arbitrary or unreasonable 

basis, and must not result in inequitable treatment of 

individuals or groups in [ ] light of the provisions and purposes 

of the public assistance titles of the Social Security Act." 45 

C.F.R. § 233.10(a)(1). Appellants claim that additional children 

born to AFDC recipients are denied benefits under section 3.5 

based solely on what the state has deemed the "irresponsible" 

behavior of their parents. The district court, however, held 

that the section "does not operate to deny any child benefits, 

but instead simply requires that child to share in the cash 

payments allotted to his or her particular AFDC household." C.K. 

v. Shalala, 883 F. Supp. at 1011. 

 Appellants also claim that while states are free to set 

their own standard of need, their "determination of need and 

amount of assistance for all applicants and recipients [must] be 

made on an objective and equitable basis." 45 C.F.R. § 

233.20(a)(1). They argue that section 3.5 violates this 

regulation because it affords different levels of cash assistance 

to families of identical size and need based upon a parent's 

decision to have a child while in receipt of AFDC. Br. at 35. 

The district court found no violation of this regulation, holding 

that "[t]he cap applies equally to all AFDC recipients who decide 

to conceive and give birth to another child since it went into 

effect," C.K. v. Shalala, 883 F. Supp. at 1011, and that "[t]he 

fact that there may be different levels of assistance given to 

families of equal size is potentially offset by the additional 

earned income disregards available to the affected families." 

Id. 

 We agree with the judgment of the district court that 

section 3.5 does not violate the HHS regulations regarding 

equitable treatment of aid recipients. Therefore, we will affirm 

the decision of that court with regard to this argument. 

 3. Work-Related Programs 

 Pursuant to 42 U.S.C. §§ 681-87, states participating 

in the AFDC program must establish and operate a "job 

opportunities and basic skills program," or JOBS. 42 U.S.C. § 

682. The services and activities of JOBS include educational 

activities, job skills training, job readiness activities to help 

prepare participants for work, job development and job placement, 

job searches, on-the-job training, work supplementation programs, 

and community work experience. 42 U.S.C. § 682(d)(1)(A). In 

addition, a state also may offer post-secondary education in 

appropriate cases as well as such other education, training and 

employment as it may deem necessary. 42 U.S.C. § 682(d)(1)(B). 

The statute provides that, when assigning AFDC recipients to a 

JOBS program activity, a state must assure that "the conditions 

of participation are reasonable, taking into account in each case 

the proficiency of the participant and the child care and other 

supportive services needs of the participant." 42 U.S.C. § 

684(a)(4). This requirement applies to "any work-related 
programs and activities under this part, and under any other 

work-related programs and activities authorized . . . under 

section 1315 of this title." 42 U.S.C. § 684(e). Appellants 

claim that New Jersey here failed to assure the reasonableness of 

conditions of participation in FDP-JOBS by parents of children 

subject to section 3.5. Their argument is that: 

 all parents of excluded children must 

 participate in FDP-JOBS whether or not the

 conditions are `reasonable;' such parents 

 must participate whether or not they have the 

 capacity to work, are disabled, can find 

 work, have the ability and proficiency to 

 participate in FDP-JOBS, have a need for 

 child care and other supportive services in 

 order to work or participate in FDP-JOBS, or 

 have a need to remain home and care for a 

 newborn child. 

Br. at 37. 

 With respect to this claim of the appellants, we agree 

with the district court that section 684 establishes that the 

provision is intended to regulate job placement programs, but not 

changes in benefit levels or work incentives based upon the 

relaxation of earned income limits. As the court stated, "[a] 

benefit cut, no matter what its purpose, is not a `program' or 

`activity' offered by the State to assure that needy families 

obtain education, training and employment." C.K. v. Shalala, 883 

F. Supp. at 1012 (quoting Beno v. Shalala, 853 F. Supp. 1195, 

1215 (E.D. Cal. 1993)). We agree with the district court's 

assessment of this issue and find no need to alter this part of 

its opinion. 

 4. Family Planning Services 

 Appellants claim that section 3.5 is a "family planning 

service" subject to section 402(a)(15) of the Social Security 

Act, 42 U.S.C. § 602(a)(15), which requires state AFDC programs 

to offer voluntary plans "for preventing or reducing the 

incidence of births out of wedlock and otherwise strengthening 

family life." Section 3.5, they argue, is a compulsory family 

planning service since it seeks to deter pregnancy in all women 

who receive AFDC. Thus, they argue that the section does not 

afford AFDC recipients the information and opportunity to make 

informed, voluntary family planning choices, but imposes a 

coercive family planning regime in violation of section 

602(a)(15). Br. at 38. 

 The district court did not agree with the appellants' 

claims. The court noted that section 602(a)(15), by its terms, 

is directed at requiring a state to provide birth control 

services to those AFDC recipients who seek them. It stated that 

section 3.5, however, addresses the problem of "births out of 

wedlock" by adjusting benefit levels. Thus, while some AFDC 

recipients may avail themselves of family planning services 

provided under section 602(a)(15) given the imposition of the 

cap, the court found that the cap itself cannot be construed as 

one of those services. While not commenting on the district 

court's assessment of section 3.5 as addressing "births out of 
wedlock," we agree with the court's decision that New Jersey's 

provision is not a family planning service within the meaning of 

section 602(a)(15). Thus, we will affirm this holding of that 

court. 

 IV. CONSTITUTIONAL ARGUMENTS 

 Finally, appellants argue that section 3.5

impermissibly interferes with their rights to due process and 

equal protection of the laws. They argue that the cap is 

irrational and illegitimate because it penalizes children for the 

behavior of their parents. In addition, they assert that the 

section should be subjected to, and fails, strict scrutiny 

review, since the state's "overriding" purpose in enacting the 

section (deterring childbirth by welfare recipients) is an 

illegitimate goal sought to be realized by broad and overly 

intrusive means. The district court decided that New Jersey's 

welfare cap is rationally related to a legitimate governmental 

purpose, in that the state's interests in giving AFDC recipients 

the same structure of incentives as working people, promoting 

individual responsibility, and strengthening and stabilizing the 

family unit are clearly legitimate. C.K. v. Shalala, 883 F. 

Supp. at 1013. Further, the court decided that the case does not 

present a situation where New Jersey unduly has burdened the 

procreative choice of the plaintiff class, since section 3.5 "in 

no way conditions receipt of benefits upon plaintiffs' 

reproductive choices." Id. at 1014. Accordingly, the court 

found that section 3.5 does not infringe appellants' procreative 

rights. 

 We have nothing to add to the district court's opinion 

on this point except to observe that it would be remarkable to 

hold that a state's failure to subsidize a reproductive choice 

burdens that choice. In short, there are no constitutional 

implications when the state does not pay a benefit to parents who 

have a child that it would not pay to parents who did not have a 

child. Rather than burdening the procreative choice of the 

plaintiff class, section 3.5 is neutral with respect to that 

choice. 

 Lastly, the court found that New Jersey's welfare 

reform efforts are rationally related to the legitimate state 

interests of "altering the cycle of welfare dependency that it 

has determined AFDC engenders in its recipients as well as 

promoting individual responsibility and family stability." Id.at 1015. 

We see no reason to disturb these holdings of the 

district court, and will therefore affirm its decision as 

described herein. 

 V. CONCLUSION 

 For all the foregoing reasons, we will affirm the 

judgment of the district court.