Court Opinion

ID: 194775
Source: CourtListenerOpinion
Date Created: 2011-02-07 02:24:50+00
Date Added: 2024-06-11T14:19:29.593301
License: Public Domain

June 10, 1993     UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT

                                     

No. 92-1764

                    JENNA SKIDGEL, ET AL.,
                     Plaintiff, Appellee,

                              v.

             MAINE DEPARTMENT OF HUMAN SERVICES,
                     Defendant, Appellee.

                              v.

                      LOUIS W. SULLIVAN,
                    Defendant, Appelllant.

No. 92-1824

                    JENNA SKIDGEL, ET AL.,
                    Plaintiffs, Appellees,

                              v.

              MAINE DEPARTMENT OF HUMAN SERVICES
                         ROLLIN IVES,
                   Defendants, Appellants.
                                     

                         ERRATA SHEET

   The opinion of this court issued on June 3, 1993, is amended

as follows:

   Page  5,  footnote   5,  line  5:    Change  "principle"  to
"principal".

   Page  6,  footnote  7,  line  2:    Change  "principle"   to
"principal".

                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 92-1764 
                    JENNA SKIDGEL, ET AL.,
                     Plaintiff, Appellee,

                              v.

             MAINE DEPARTMENT OF HUMAN SERVICES,
                     Defendant, Appellee.

                              v.

                      LOUIS W. SULLIVAN,
                    Defendant, Appellant.

No. 92-1824

                    JENNA SKIDGEL, ET AL.,
                    Plaintiffs, Appellees,

                              v.

              MAINE DEPARTMENT OF HUMAN SERVICES
                         ROLLIN IVES,
                   Defendants, Appellants.

                                         

        APPEALS FROM THE UNITED STATES DISTRICT COURT

                  FOR THE DISTRICT OF MAINE
                                         

           [Hon. Brock Hornby, U.S. District Judge]
                                                  
                                         

                            Before
                   Torruella, Circuit Judge,
                                           
                Bownes, Senior Circuit Judge,
                                            
                  and Stahl, Circuit Judge.
                                          
                                         

Marina  E. Thibeau,  Assistant Attorney  General, and  Michael  E.
                                                                  
Carpenter, Attorney General, on  brief for defendant-appellant  Rollin
     
Ives, Commissioner, Maine Department of Human Services.
John  F. Daly,  Appellate  Staff, Civil  Division,  Department  of
             
Justice, with whom  Stuart M. Gerson, Assistant Attorney  General, and
                                
Richard S.  Cohen, United  States Attorney,  and Robert S.  Greenspan,
                                                                 
were on  brief for third-party defendant-appellant  Louis W. Sullivan,
Secretary of Health and Human Services.

Frank D'Alessandro, with whom James Crotteau, Patricia Ender,  and
                                                            
Pine Tree Legal Assistance, were on brief for plaintiffs-appellees.
                      

                                         

                         June 3, 1993
                                         

          BOWNES, Senior Circuit Judge.  The Secretary of the
          BOWNES, Senior Circuit Judge.
                                      

Department of Health  and Human Services (HHS) and  the Maine

Department of Human  Services (DHS) appeal a  decision of the

district  court invalidating and enjoining the enforcement of

certain regulations  and policies  regarding Aid to  Families

with  Dependent  Children  (AFDC),  upon  finding  that  they

conflicted  with the  plain language  of the  Social Security

Act, 42 U.S.C.   601 et seq.  
                           

          At  issue  is  the  application  of   two  distinct

provisions  of   the  Social   Security  Act,  42   U.S.C.   

602(a)(38), covering  the  composition  of  the  AFDC  filing

unit,1  and  42  U.S.C.    607  (b)(1)(B)(iv),  covering  the

                    

1.  42 U.S.C.   602(a)(38) provides, in pertinent part, that,

     in  making the  determination  under paragraph  (7)
     with  respect  to a  dependent  child  and applying
     paragraph (8),  the State  agency shall (except  as
     otherwise provided in this part) include--

          (A) any parent of such child, and

          (B) any  brother or  sister of such  child, if
     such  brother  or   sister  meets  the   conditions
     described in clauses (1)  and (2) of section 606(a)
     of this title or in section 607(a) of this title,

     if such parent, brother, or sister is living in the
     same home as the dependent child, and any income of
     or  available for  such parent, brother,  or sister
     shall be included in  making such determination . .
     . [.]

We refer  to the AFDC filing unit  as the family filing unit,
and to this  provision of  the statute as  the family  filing
rule. 

                             -2-
                              2

deduction   of   unemployment  compensation   from   an  AFDC

payment,2 to  a particular situation.   That situation occurs

where  the principal  wage-earner  in a  two-parent household

becomes unemployed, and the  household includes both at least

one child common  to the two parents  and at least  one child

who   is  the  stepchild  of  the   principal  earner.    The

stepchild[ren] of the principal earner receive AFDC, pursuant

to  42 U.S.C.   606(a), because they are deprived of parental

support due to the continuous absence from the home, death or

incapacity  of a parent.3   Prior to the  unemployment of the

                    

2.  42 U.S.C.   607(b)(1)(B)(iv) provides,

     for  the  reduction of  the  aid  to families  with
     dependent  children otherwise payable  to any child
     or relative  specified  in subsection  (a) of  this
     section   by  the   amount   of  any   unemployment
     compensation that such child's parent  described in
     subparagraph (A)(i) receives under  an unemployment
     compensation law of a State or of the United States
     . . . [.]

3.  42 U.S.C.   606(a) provides:

     The term "dependent child"  means a needy child (1)
     who has  been deprived of parental  support or care
     by reason of the  death, continued absence from the
     home  (other  than  absence  occasioned  solely  by
     reason  of the  performance of  active duty  in the
     uniformed  services  of  the  United   States),  or
     physical or mental incapacity  of a parent, and who
     is  living with  his  father, mother,  grandfather,
     grandmother,    brother,     sister,    stepfather,
     stepmother,  stepbrother, stepsister,  uncle, aunt,
     first  cousin,  nephew, or  niece,  in  a place  of
     residence  maintained   by  one  or  more  of  such
     relatives  as his or their own home, and (2) who is
     (A) under the age of eighteen, or (B) at the option
     of the State, under the age of nineteen and a full-
     time  student  in a  secondary  school  (or in  the

                             -3-
                              3

principal  earner,  neither  the  principal  earner  nor  the

child[ren]  common to both parents are included in the family

filing unit.  

          Pursuant  to HHS/DHS  policy and  regulations, once

the principal  earner becomes  unemployed, the family  filing

rule requires  that the  principal earner and  the child[ren]

common to both  parents be  included in the  filing unit,  as

well.4    Such  inclusion is required  because the child[ren]

are considered  dependent under  a separate provision  of the

statute, 42 U.S.C.    607(a), due to the unemployment  of the

                    

     equivalent   level   of  vocational   or  technical
     training),  if, before he  attains age nineteen, he
     may reasonably be expected  to complete the program
     of such secondary school (or such training)[.]

4.  The  Secretary's interpretation of the family filing rule
has been embodied in regulations  and official transmissions.
See 45  C.F.R.    206.10(a)(1)(vii) which provides,  in part,
   
that,

     in  order  for  the   family  to  be  eligible,  an
     application with respect to  a dependent child must
     also include,  if living in the  same household and
     otherwise eligible for assistance:

     (A)  Any natural or  adoptive parent, or stepparent
     (in  the  case  of  States  with  laws  of  general
     applicability); and

     (B)   Any  blood-related  or  adoptive  brother  or
     sister.
     . . .

See also  SSA Transmittal 86-1 at 9  (Jan. 12, 1986) (on two-
        
step process  whereby application of family  filing rule must
precede determination of need).

                             -4-
                              4

parent  who  is  the principal  earner.5    According to  the

Secretary's interpretation  of  the family  filing rule,  the

common child[ren] now meet "the conditions described in . . .

  607(a)."  42 U.S.C.   602(a)(38).   

          In   the  case   of  the   plaintiff   class,6  the

unemployment compensation received by the principal earner is

then  subtracted from the AFDC  benefit payable to the newly-

composed  family  filing  unit.    Pursuant  to 45  C.F.R.   

233.20(a)(3)(ii)  (B),  unemployment   compensation  is   not

considered as income and does not figure into the calculation

of  need, but  is deducted  from the  AFDC payment  after the

                    

5.  42 U.S.C.   607(a) provides:

     The term "dependent  child" shall,  notwithstanding
     section 606(a) of this title, include a needy child
     who meets the requirements of section 606(a)(2)  of
     this  title,  who  has been  deprived  of  parental
     support or  care by reason of  the unemployment (as
     determined in accordance with  standards prescribed
     by  the  Secretary)  of   the  parent  who  is  the
     principal earner, and who is living with any of the
     relatives  specified in  section 606(a)(1)  of this
     title in a place of residence maintained by one  or
     more of such relatives as his (or their) home. 

6.  The class was certified as follows:

     All  households  in  the  State of  Maine  who  are
     recipients  of AFDC  benefits  as  of November  16,
     1990, or  who will  apply for  AFDC benefits  on or
     after  November  16,  1990,  and   whose  household
     composition  includes at  least two adults  and two
     children where at least  one child is the child  of
     one but not both of the adults in the household and
     at least one child  is the child of both  adults in
     the household  and where the  adult who is  not the
     parent of  the  first child  receives  unemployment
     benefits.

                             -5-
                              5

amount of that payment  has been established.7   This special

treatment of  unemployment  compensation is  the  Secretary's

interpretation   and   implementation    of   42   U.S.C.    

607(b)(1)(B)(iv).    The  practical  result  of  the  HHS/DHS

policies is a reduction of the AFDC payment going to families

in the plaintiff class.8  

                    

7.  45 C.F.R.   233.20(a)(3)(ii)(B) provides:

     In determining financial eligibility and the amount
     of  the assistance  payment  all  remaining  income
     (except  unemployment  compensation received  by an
     unemployed principal earner) and, except  for AFDC,
     all  resources may  be  considered  in relation  to
     either  the State's  need  standard or  the State's
     payment   standard.     Unemployment   compensation
     received by an unemployed principal earner shall be
     considered only by  subtracting it from the  amount
     of  the assistance  payment after  the  payment has
     been determined under the State's payment method[.]

8.  The  operation of  these policies  can be  illustrated by
taking the case of one of the plaintiffs, Deborah Blake.  Ms.
Blake and  her husband live  with their  mutual child,  Shawn
Blake,  and  Ms. Blake's  two  children,  James and  Courtney
Morton.  While  Mr. Blake was  employed, the family  received
AFDC for Ms. Blake's children, James and Courtney Morton, who
met the definition of dependent children provided in   606(a)
of  the  statute.   At  that  time,  the  family filing  rule
required  that    the   two  dependent  children,  James  and
Courtney, and  their parent,  Ms. Blake,  be included  in the
filing  unit.   The  rule did  not  require the  inclusion of
either Shawn Blake, because he was not considered a dependent
child, or  Mr. Blake,  because he  was not  the parent  of an
AFDC-eligible child.   A portion of  Mr. Blake's income  was,
however, deemed available to the filing unit, pursuant to the
stepparent deeming  rule, explained infra Part  I, Section A.
                                         
Before  the unemployment  of Mr.  Blake, the  family received
$453.00  each month in AFDC,  and Mr. Blake  earned $697.00 a
month.
    Once Mr. Blake became  unemployed, the family filing rule
required the  inclusion  of  both  Shawn (who  then  met  the
definition  of a dependent child in   607(a)) and his parent,
Mr. Blake.  Because  unemployment compensation is disregarded

                             -6-
                              6

          Plaintiffs  brought  this action  against defendant

Rollin Ives,  Commissioner of  the Maine Department  of Human

Services,  arguing  that  the  State  was  violating  federal

statutory   standards  in  determining  the  amount  of  AFDC

payments  going  to members  of their  class.   Ives  filed a

third-party  complaint against  Louis Sullivan,  Secretary of

the United  States Department  of Health and  Human Services.

The case went to the district court on a stipulated record. 

          In a memorandum decision, the district  court ruled

in  favor of the plaintiffs  on the grounds  that the HHS/DHS

interpretations of both  the family filing rule, 42  U.S.C.  

602(a)(38),   and   the   provision  regarding   unemployment

compensation,  42  U.S.C.    607(b)(1)(B)(iv),  impermissibly

conflicted  with  the plain  meaning  of  the statute.    See
                                                             

Skidgel  v. Ives,  No. 90-0209-B,  slip op.  (D. Me.  Jan. 2,
                

1992) [hereinafter Memorandum Decision].  The  district court

read the family filing rule to require  that children defined

as dependent under   607(a) be determined financially "needy"

before they could be included in the filing unit.  See id. at
                                                         

                    

in  the determination of need,  the new filing unit initially
met the criteria for the maximum AFDC payment for a family of
five,  $685.00.    Pursuant  to  regulations  interpreting   
607(b)(1)(B) (iv),  the State  then subtracted the  amount of
unemployment  compensation received  by  Mr. Blake,  $498.80,
from the maximum  AFDC payment  of $685.00, to  arrive at  an
AFDC  payment  of  $186.00.    Although the  total  level  of
government income going to the family increased following Mr.
Blake's    unemployment,    the   AFDC    payment   decreased
considerably.

                             -7-
                              7

7.      The   district   court   also   determined   that    

607(b)(1)(B)(iv),  by  its  express  terms,  applies only  to

children eligible under   607(a), and does not reach children

eligible under   606(a).   See id. at 4-5.  On  March 23, the
                                 

court issued  a final  judgment enjoining the  enforcement of

the implicated HHS/DHS policies and regulations.  See Skidgel
                                                             

v. Ives, No.  90-0209-B-H, slip  op. (D. Me.  Mar. 23,  1992)
       

(final judgment).

          Plaintiffs/appellees urge us to affirm the district

court's  decision.    Defendants/appellants  argue  that  the

district  court's   reading  of   42   U.S.C.      602(a)(38)

contravenes  the  very purpose  of  the  rule, and  draws  an

artificial distinction between   606(a) children and   607(a)

children.   As  a  result of  the  district court's  holding,

non-needy  children who  meet the  definition of  a dependent

child provided  in  607(a)  are not compulsorily  included in

the family filing unit.   By contrast, the weight  of federal

authority requires non-needy children who meet the definition

of a dependent child  provided in   606(a) to be so included.

See discussion infra Part II,  Section A 3.  With respect  to
                    

the  district court's  reading of    607(b)(1)(B)(iv),  it is

defendants'  position  that  the  court  failed  to  consider

textual  ambiguity and ultimately  neglected to reconcile its

reading with the family filing rule, 42 U.S.C.    602(a)(38).

                             -8-
                              8

For the reasons that  follow, we reverse the decision  of the

district court.

                              I.
              Statutory and Regulatory Scheme  
              Statutory and Regulatory Scheme
                                             

          AFDC   is   a  cooperative   federal-state  program

authorized  by Title  IV-A  of the  Social  Security Act,  42

U.S.C.     601  et seq.     The  AFDC  program  provides cash
                      

assistance to certain needy families with dependent children.

The program  is administered by the states in accordance with

the Social Security Act and the regulations and directives of

the Secretary of  HHS.  We begin with a  brief explanation of

the implicated statutory provisions  and the regulations  and

policies which implement them. 

A.   Determination of Financial Need
                                    

          In   addition   to   meeting    other   eligibility

requirements,  families  receiving AFDC  must  be financially

needy.   The  main statutory  provision covering  need is  42

U.S.C.     602(a)(7),  which  provides  guidelines  to  state

agencies for  assessing the  resources available to  a family

unit.  In the paragraph which follows, 42 U.S.C.   602(a)(8),

Congress sets forth  criteria for certain income  that may be

disregarded in the determination of need.  The family  filing

rule, 42  U.S.C.    602(a)(38),  establishes the  individuals

whose  resources must  be considered  in determining  need in

accordance with 42 U.S.C.    602(a)(7) and (8).  

                             -9-
                              9

          Financial  eligibility is determined by comparing a

family unit's countable income (i.e., income  remaining after

disregards allowed by law) to the standard of need adopted by

the  State.   The  standard of  need  is "the  amount  deemed

necessary by the State to maintain a hypothetical family at a

subsistence level."   Shea v.  Vialpando, 416  U.S. 251,  253
                                        

(1974).   States assign a  standard according to  the size of

the unit applying for AFDC.  In 1990 in Maine the standard of

need for  a family of four  was $819.00.  An  AFDC payment in

Maine is calculated by  subtracting a family unit's countable

income,  other than  unemployment compensation received  by a

principal earner,  from the standard of  need established for

the relevant family size.  States are not, however,  required

to  provide  families with  the full  standard  of need.   In

Maine, the maximum AFDC payment is a fixed percentage (69.4%)

of the standard  of need.  Maine permits families to fill the

"gap"  between  the need  standard  and  the maximum  payment

standard  without penalty.    In other  words, families  with

countable income below the need standard, but above the level

of payment paid by  the State, may still receive  the maximum

payment from the State.  This gap has practical ramifications

in  the  instant  case  because  of  the  operation  of   the

stepparent deeming rule, codified  at 42 U.S.C.   602(a)(31).

In the case of the plaintiff class, prior to the unemployment

of the  principal  earner  the family  filing  unit  did  not

                             -10-
                              10

include either the principal  earner or the half-siblings who

were  not then  dependent children  for  the purposes  of the

statute.   See  42 U.S.C.    602(a)(38).   A  portion of  the
              

stepparent's income was,  however, "deemed" available  to the

unit, pursuant to the  stepparent deeming rule.  For  many in

the plaintiff class, the  income deemed available fell within

the  gap permitted by the  State, so that  when the principal

earners were employed, the AFDC benefit to  the unit eligible

under   606(a) either was not affected or was only marginally

affected by the deemed income. 

 B.  Unemployment Compensation and   607 
                                        

          The   current  AFDC   statute   provides  for   two

categories  of  "dependent  children":  those  defined  in   

606(a), who are deprived due to the continuous absence, death

or incapacity of a parent, and those defined in   607(a), who

are deprived due to the unemployment of the parent who is the

principal earner.  As originally enacted, AFDC was limited to

the category of children defined in   606(a).  In the 1960's,

Congress expanded  the program  to include children  deprived

because  of  a parent's  unemployment.    At  that time,  the

so-called AFDC-UP program  (unemployed parent, earlier called

AFDC-UF, for  unemployed father) was available  only to those

families who  were not receiving unemployment  benefits.  See
                                                             

Philbrook  v.  Glodgett,  421  U.S.  707,  711  (1975).    In
                       

Philbrook,  the  Supreme  Court  decided,  in  essence,  that
         

                             -11-
                              11

parents had  the choice  of applying either  for unemployment

compensation or  for AFDC.  See  id. at 719.   In response to
                                   

the  Philbrook  decision,  Congress  amended  the  statute to
              

assure  that  unemployed   parents  would  seek   and  obtain

unemployment compensation first, and that AFDC payments would

be  used  only  to  "supplement  UC  benefits  up to  AFDC-UF

levels."  See H.R. CONF. REP. NO. 1745, 94th Cong., 2d  Sess.
             

28 (1976), reprinted in 1976 U.S.C.C.A.N. 5997, 6048-49.  The
                       

1976  amendment  was  the   predecessor  to  the  current    

607(b)(1)(B)(iii)  and  (iv).   See  Pub.  L.  No. 94-566,   
                                   

507(a)(2), 90  Stat. 2688  (1976) (originally codified  at 42

U.S.C.    607(b)(2)(C) and (D) (1976)).

C.   The Family Filing Rule
                           

          Prior to 1984, families  applying for AFDC lawfully

could  choose to  exclude household  members from  the filing

unit if  those members  had resources  that would reduce  the

family's  benefit or make the family ineligible for AFDC.  In

1983,  the  Secretary  of  HHS  proposed  an  amendment  "`to

establish uniform rules on  the family members who  must file

together for AFDC, and the situations in which income must be

counted.'"    Bowen v.  Gillard,  483  U.S. 587,  592  (1986)
                               

(citing  Letter of 25 May 1983, to the Honorable George Bush,

President of the Senate).   As part of the  Deficit Reduction

Act of  1984, Pub. L.  No. 98-369, (DEFRA),  Congress amended

the AFDC program by adopting the  family filing rule.  See 98
                                                          

                             -12-
                              12

Stat.  1145  (1984)(codified,  as  amended, at  42  U.S.C.   

602(a)(38)).  The legislative purpose behind the enactment of

the rule, as reported by the Senate Finance Committee, was as

follows:                           

                        "`Present Law

     "`There is  no requirement in the  present law that
     parents and  all siblings  be included in  the AFDC
     filing unit.  Families  applying for assistance may
     exclude from the filing unit certain family members
     who  have  income  which  might reduce  the  family
     benefit.   For  example, a  family might  choose to
     exclude a child who is receiving social security or
     child  support  payments,  if  the  payments  would
     reduce the  family's benefits by  an amount greater
     than  the amount  payable on  behalf of  the child.
     . . .

                   "`Explanation of Provision

     "`The provision approved by the Committee would    
     require States to include in the filing unit the
     parents and all dependent minor siblings (except SSI
     recipients and any stepbrothers and stepsisters)
     living with a child who applies for or receives AFDC
     . . . .

     "`This change will end the present practice whereby
     families exclude members with income in order to
     maximize family benefits, and will ensure that the
     income of the family members who live together and
     share expenses is recognized and counted as
     available to the family as a whole.'" 

Bowen,  483 U.S. at 593-94 (quoting from S. Print No. 98-169,
     

980  (1984)).   Thus,  the  amendment  sought to  compel  the

inclusion  in the  family filing  unit of  dependent children

living in the same home as the child receiving AFDC.  When it

was  enacted,  the  family  filing  rule  required  only  the

inclusion of    606(a)  children, children who  were deprived

                             -13-
                              13

due  to  the continuous  absence,  incapacity or  death  of a

parent.   As part  of the  Tax Reform Act  of 1986,  Congress

amended     602(a)(38)  to  include  children  who  meet  the

conditions described in    607(a).  See 100 Stat.  2085, 2917
                                       

(1986)  (  1883(b)(2)(A)  of the  Act).   Under a  subsection

entitled, "Technical  Corrections to  AFDC and  Child Support

Programs,"  the  Senate  Report  accompanying  the  amendment

explained that no  distinction between children deprived  due

to  the absence, incapacity or  death of a  parent, and those

deprived due to the  unemployment of a parent,  was intended.

S. REP. NO. 313, 99th Cong., 2d Sess. 1074 (1986).9 

                             II.
                           Analysis
                                   

          The issues involved in this case are purely ones of

statutory construction.   Our review is,  therefore, de novo.

United States v. M.I.M., 932 F.2d 1016, 1019 (1st Cir. 1991).
                       

See  generally Commonwealth of  Mass. v. Lyng,  893 F.2d 424,
                                             

428  (1st Cir.  1990) (questions  of law  decided by  a trial

court are not binding on the reviewing court).  

A.   The Family Filing Rule
                           

                    

9.  The Senate Report provides, in part, that,

     no  such distinction  between these  two categories
     was intended, and this provision will clarify that,
     in a State that  provides AFDC on the basis  of the
     unemployment   of  a   parent,  siblings   who  are
     dependent for  that reason must be  included in the
     AFDC unit. 
Id.
   

                             -14-
                              14

          1.  Background
                        

          We  begin  by  addressing  the  application of  the

family filing rule, 42 U.S.C.    602(a)(38), to the plaintiff

class.    The rule provides that in making the determinations

of  need  with respect  to  a  dependent child,  states  must

include  any parent of a  dependent child and  any brother or

sister  if  such  brother  or sister  "meets  the  conditions

described  in clauses  (1) and  (2) of  section 606(a)  or in

section  607(a)."  Id.    Plaintiffs  challenge  the  State's
                     

practice of including the child common to both parents in the

family   filing   unit   because,   under   the   Secretary's

interpretation, the child meets the conditions described in  

607(a).   We  must  determine  what  Congress meant  when  it

referred  to  the  "conditions  described" in     607(a);  in

particular, whether Congress intended to  incorporate need as

a condition that must be met  before a child may be  included

in the filing unit.  Although several courts have interpreted

the family  filing rule with  respect to children  defined as

dependent  under    606(a), the  rule as  originally enacted,

none  has specifically interpreted the rule with respect to  

607(a) children.  See discussion infra Part II, Section A 3.
                                      

          The district court held that the family filing rule

requires the inclusion of children who meet the definition of

dependent found in    607(a) only if such children  are first

determined  to be needy.   In so holding,  the district court

                             -15-
                              15

recognized the abundance  of federal authority requiring  the

inclusion  of  children  defined  as dependent  in     606(a)

without such a  prior determination of need.   See Memorandum
                                                  

Decision  at  7  n.11.    The  district  court's  reason  for

distinguishing between these categories of  children centered

on the  placement  of  the  word "needy"  in  the  respective

sections of  606(a)  and  607(a).   Both  sections  begin  by

stating that "the term `dependent child' means a needy child"

who  meets  certain  conditions.   42  U.S.C.      606(a) and

607(a).  The essence of the  district court's distinction was

that, because the word "needy" appears before clauses (1) and

(2) in    606(a),10 it is not to be  considered in making the

determination  under   606 (a) for the reason that the family

filing unit rule  refers only to the  conditions specified in

those clauses.   In   607  (a), by contrast,  the word  needy

appears within the  section which is not broken into numbered

clauses,  and  the family  filing  rule  simply references   

607(a).11  The  placement of  the word "needy"  was the  sole

basis  for  what the  district court  found  to be  the plain

meaning of the rule. 

                    

10.  See  supra note  3.   The  statute  begins, "[t]he  term
               
`dependent  child'  means  a  needy child  (1)  who  has been
deprived of parental support . . . [.]"

11.  See  supra note  5.   Section 607(a)  has no  demarcated
               
clauses, and  simply  begins, "[t]he  term `dependent  child'
shall, notwithstanding section 606(a)  of this title, include
a needy child who has been deprived of parental support . . .
."

                             -16-
                              16

          Our inquiry does not end with  the placement of the

word "needy"  in    607(a) of  the statute.   We examine  the

family  filing  rule  in the  context  of  its  place in  the

statutory  scheme and in light of its statutory purpose.  See
                                                             

Conroy v.  Aniskoff, 61 U.S.L.W.  4301, 4302 (U.S.  March 31,
                   

1993)  (No.  91-1353)  (noting  the "`cardinal  rule  that  a

statute  is to be read as a  whole'" and that "the meaning of

statutory  language,  plain or  not,  depends  upon context."

(citations omitted));  Evans v. Commissioner, Maine Dep't. of
                                                             

Human  Servs., 933 F.2d 1,  5 (1st Cir.  1991) (concluding on
             

the  basis of  the language  of the  statute as  read in  the

context of its structure  and in the light of  its purposes).

Cf. St. Luke's Hosp. v. Secretary of Health and Human Servs.,
                                                            

810  F.2d  325, 331  (1st  Cir.  1987) (applying  a  detailed

analysis after  an initial, literal reading  of the statute).

A thorough  analysis is especially warranted  where, as here,

we  are charged  with  interpreting a  complex and  technical

statute which has been  amended over time and which  contains

elaborate, internal cross-references. 

          As  we  explain  below,  we  think  that  the  term

"conditions described" in the family filing rule is ambiguous

with respect to children defined as dependent under   607(a).

When  we   find  such  ambiguity   in  a  statute,   we  give

considerable  weight to  the  interpretation rendered  by the

agency charged  with administering that statute.   See Evans,
                                                            

                             -17-
                              17

933  F.2d at  7.   Our  examination  of the  language in  the

context of  its place in the statutory scheme and in light of

its  statutory  purpose  convinces  us  that  the Secretary's

interpretation of    602(a) (38)(B) is  not only permissible,

but fully consonant with  the will of Congress.   See Chevron
                                                             

U.S.A., Inc.  v. Natural Resources Defense  Council, 467 U.S.
                                                   

837,  843 (1984) (explaining that  if a statute  is silent or

ambiguous with  respect to the issue  presented, the question

for  the court is  whether the agency's answer  is based on a

permissible construction of the statute).

          2.   Ambiguity
                        

          The district court assumed  that Congress meant the

term "conditions  described" to incorporate all  of the terms

listed in  the cross-referenced section, 607(a),  and thus to

include the term "needy."  Although the  term "needy" plainly

appears in    607(a),  it does  not  necessarily follow  that

Congress intended for that term to be a "condition described"

for the purpose of   602(a)(38).  Section 607(a) and   606(a)

function in the statutory scheme to define the two categories

of  "dependent  children"  who  may  be  eligible  for  AFDC.

Regardless of which categorical  definition is used, no child

or family may  receive AFDC  unless that child  or family  is

financially needy.   The family filing  rule has a  different

                             -18-
                              18

function in the statutory  scheme; that of defining  the unit

pursuant  to which need  is be determined  under   602(a)(7).

This function is apparent  from the plain terms of  the rule,

itself,  which  begins: "in  making  the determination  under

paragraph (7) . . . a State agency shall include . . . ."  As

discussed supra in Part  I Section A, need for  AFDC purposes
               

is not a fixed condition; its assessment depends on a variety

of factors.  To assume that Congress intended to include need

among  the  "conditions described"  for  the  purpose of  the

family filing  rule--which, by its plain  terms, exists prior

to the assessment  of need and as a basis  for the definition

of need--is not the most sensible reading of the rule.  

          We find that it is  not clear from the face  of the

rule which conditions  Congress intended to include   when it

referred to the "conditions described" in   607(a).  While in

the abstract,  it  might  be reasonable  to  presume  that  a

reference to the "conditions described" in a cross-referenced

section  refers to  all descriptive  terms contained  in that

section, such a reading  is problematic in this context.   By

including "needy" as a  "condition[] described," the district

court's  interpretation does  not properly  account for,  and

reads circularity into, the facially-evident  function of the

family filing rule. 

          3.   Case Law and Legislative History
                                               

                             -19-
                              19

          Our examination of  the case  law interpreting  the

family filing rule as originally enacted, and the legislative

history  behind Congress'  amendment  of the  rule  to add   

607(a),  leads  us  to  conclude that  the  district  court's

interpretation  is erroneous  and to  uphold  the Secretary's

policy.         

          Part of  examining the language in  context entails

reviewing  the  case law  which  has  interpreted the  family

filing  rule to  compel the  inclusion of  non-needy children

defined as dependent under    606(a).  Overwhelmingly, courts

have  rejected the argument that a child must be needy before

that child is to be included  in the family filing unit.  See
                                                             

Gorrie v. Bowen, 809 F.2d  508, 513-16 (8th Cir. 1987).   See
                                                             

also  Bradley v. Austin, 841 F.2d 1288, 1294 (6th Cir. 1988);
                       

Creaton  v.  Bowen, 826  F.2d 6  (9th  Cir. 1987);  Oliver v.
                                                          

Ledbetter, 821 F.2d 1507, 1513 (11th Cir. 1987).  The Supreme
         

Court,  in  a case  upholding  the  constitutionality of  the

family  filing rule,  dismissed the  argument in  a footnote,

citing  to clear  legislative  intent  to  include  non-needy

children in the family filing  unit.  See Bowen, 483 U.S.  at
                                               

593 n.5.   The Court  commented that construing  the rule  to

require the inclusion of  only needy children was "completely

inconsistent with the intent of  Congress as explained in the

Secretary's request for legislation, in the Senate Print, and

in the Conference Report as well."  Id.  Rather than pursuing
                                      

                             -20-
                              20

its own analysis, the Court noted  its satisfaction with that

performed  by the district court  in Gillard v.  Kirk, 633 F.
                                                     

Supp.  1529,   1548  (W.D.N.Y.  1986),   and  made  favorable

reference  to the  Eighth Circuit's  decision in  Gorrie, 809
                                                        

F.2d at 513-516.  See Bowen, 483 U.S. at 587 n.5. 
                           

          The  express purpose  behind the  enactment of  the

family  filing   rule,  as  apparent  in   the  Senate  Print

referenced by the Supreme Court and cited and discussed supra
                                                             

in  Part I,  Section C,  was to  change the  practice whereby

families  could exclude  children  who had  other  resources,

i.e.,  children who  were not  independently needy,  from the

family filing unit. See  Bowen, 483 U.S. at 599  (noting that
                              

the purpose of the rule is to "deny [] a family the right  to

exclude  a supported  child  from the  filing  unit").   This

legislative history formed  the cornerstone  of the  district

court's  reading of  the family  filing rule  to  require the

inclusion of non-needy children in  Gillard, 633 F. Supp.  at
                                           

1546. 

          It  is true that in Gorrie, the other case cited by
                                    

the Supreme Court,  the court  began with the  language of   

606(a) and  was initially persuaded  by the placement  of the

word "needy" outside the numbered clauses.  The court did not

rest its conclusion solely on this reading, however, but went

on to do a detailed, contextual analysis of the family filing

rule.    The  detailed  analysis  corroborated  that  court's

                             -21-
                              21

initial  reading of the rule to require the inclusion of non-

needy  children in the family  filing unit.   See Gorrie, 809
                                                        

F.2d at 513-16.   

          Unlike the  court in Gorrie, the  district court in
                                     

the instant case stopped with its  reading of   607(a).   The

court did not go  on to consider the particular  meaning that

term might have  in the  context of the  family filing  rule.

Had  the  district  court  continued to  perform  a  detailed

analysis,  it  would  have  discovered  that the  legislative

purpose  of  the  rule, and  its  function  in the  statutory

scheme, were not  served by  its reading.   Like the  Supreme

Court, we conclude that the  real problem with construing the

rule to  require the exclusion of non-needy  children is that

such a construction flies in the face of Congressional intent

to end the practice of excluding non-needy children  from the

filing unit.  We  are not persuaded by the  truncated reading

of  the district court,  but proceed to  address the district

court's correct concern that    607(a) is drafted differently

from   606(a).  

          The  word  "needy" appears  in     607(a), and  the

family filing rule references the entire section, whereas the

"needy"  is offset  in    606(a) and  the family  filing rule

refers  to  clauses  that do  not  contain  that  term.   The

question is what effect to give to that difference, given the

function of the  rule in the  statutory scheme, its  purpose,

                             -22-
                              22

and the  manner in which  the rule has been  interpreted.  In

other  words, was Congress'  cross-reference to a previously-

drafted section of the statute in which the criterion of need

is not set  off in a  separate clause but appears  within the

referenced section, a  clear signal of its  intent to include

need as one  of the  "conditions described" as  applied to   

607(a) children?  We do not think so.    

          First,  to  the  extent   that  the  issue  is  the

exclusion of non-needy children  from the family filing unit,

the same analysis of legislative purpose used with respect to

  606(a) children  applies to  this case.   Moreover, in  the

previously-  cited   Senate  Print  accompanying   the  DEFRA

amendment, the Congress made clear who the exceptions to  the

family filing rule were  to be.  Namely, the  provision would

require the inclusion of  all dependent minor children except

SSI recipients and  stepchildren.  See  Bowen, supra Part  I,
                                                    

Section  C (citing S. Print  No. 98-169 at  980).  Otherwise,

the family filing unit  rule was intended to be  an inclusive

rule, inclusive especially of non-needy siblings.  

          Second,  the  Congressional   history  behind   the

amendment  of 42  U.S.C.    602(a)(38),  to include  children

eligible  under    607(a), unambiguously  expresses Congress'

intention not to distinguish between children  eligible under

the two sections.  See S. REP.  NO. 313 at 1074, supra note 9
                                                      

and accompanying text.   Congress, having omitted a reference

                             -23-
                              23

to   607(a)  children in  the original rule,  stated that  it

intended  to  create  no  such  distinction between  children

eligible under   606(a) and children eligible under   607(a).

That   Congress  labeled   the   amendment   a   "[t]echnical

[c]orrection[]"  further  underscores  its intention  against

substantively  different  treatment  of these  categories  of

children.  In  sum, we ascertain no basis  for a finding that

Congress intended to treat these categories of  children in a

substantively different  manner, permitting the  exclusion of

non-needy children  eligible under    607(a), but  compelling

the inclusion of such children eligible under   606(a).12 

          In overturning the finding  of the district  court,

we note that  this matter of  statutory construction is  made

difficult by the  patchwork manner in which  the AFDC statute

has  been enacted.   We deal  with a  statute, and  a section

within  a statute,  which  has been  amended frequently,  and

which is not rewritten in  its entirety with each  amendment.

                    

12.  Plaintiffs note that the  legislative history of the Tax
Reform Act, which amended the family filing rule to include  
607(a)  children,  refers  to   the  required  inclusion   of
dependent  children.     From  Congress'  use   of  the  word
dependent, plaintiffs conclude that Congress meant to require
the  inclusion  of  only  needy      607(a)  children.    The
legislative history of the  DEFRA amendment which created the
original family  filing  rule  covering     606(a)  children,
however,  similarly  refers  to  the compelled  inclusion  of
dependent  children.   As  we have  explained, the  compelled
inclusion  of    606(a)  children  has been  upheld  by other
federal  courts.   Plaintiffs' argument,  without more,  does
nothing to advance  a reasonable basis for treating    607(a)
children differently from   606(a) children.  

                             -24-
                              24

As we observed  in Sweeney v. Murray, 732 F.2d 1022, 1024-25,
                                    

1027(1st Cir. 1984), with regard to a different subsection of

the  AFDC statute,  the provision  at issue  in this  case is

anything but elegantly drafted, but its legislative directive

is comparatively clear.  We  hold that the Secretary's policy

of requiring the inclusion of non-needy   607(a)  children in

the filing unit resonates with the legislative purpose of the

rule and upholds its integrity in the statutory scheme.    

B.  The Reduction of AFDC by Unemployment Compensation
                                                      

          The final  issue is  more difficult.   The district

court  held  that  the  HHS/DHS  practice  of  reducing  AFDC

payments  by the  amount  of  the  stepparents'  unemployment

conflicted   with  the   plain   meaning  of   42  U.S.C.    

607(b)(1)(B)(iv).   Once again,  the district  court anchored

its conclusion in what it characterized as plain meaning, and

ended  its  inquiry there.    The  court  determined  that   

607(b)(1)(B)(iv) authorized the reduction only of the  income

"`payable  to  [a]  child .  .  .  specified  in [ 607(a)].'"

Memorandum Decision at 5.  Thus, only the AFDC payments going

to children eligible under    607(a) would be reduced  by the

unemployment compensation received by the principal earner.  

          Defendants point to two problems  with the district

court's  interpretation.    First,  the  court  ignored  that

  607(b)(1)(B)(iv)  of  the   statute  actually  compels  the

reduction  of the AFDC payment  otherwise payable to "a child

                             -25-
                              25

or  relative  specified" in    607(a).   The  word "relative"
            

creates an ambiguity in the statute which the court failed to

apprehend.   Second,  once  this language  is  placed in  the

context of the larger  statutory scheme, the district court's

reading  cannot be  reconciled with  the family  filing rule.

For the  reasons that follow,  we conclude that  deference to

the Secretary is proper in this instance.    

          We first examine the meaning of the word "relative"

in   607(b)(1)(B)(iv).   That section directs attention to  a

child  or relative  specified  in    607(a).   Turning  to   

607(a), one  sees that  the  reference encompasses  relatives

specified in    606(a)(1) -- a  "father, mother, grandfather,

grandmother,   brother,   sister,   stepfather,   stepmother,

stepbrother,  stepsister, uncle, aunt,  first cousin, nephew,

or  niece."   42 U.S.C.    606(a).   Defendants argue  that a

plausible interpretation  of    607(b)(1)(B)(iv)  is that  it

directs the deduction of unemployment compensation from  AFDC

payable  to any   607(a) child, or to any listed, co-resident

relative of that child.   Plaintiffs offer a  strong contrary

argument  that  the  relatives  listed  in     606(a)(1)  are

intended  to represent  only the  caretaker relatives  of the

dependent   child.     Whether   for   the   purposes  of    

607(b)(1)(B)(iv),  Congress  meant  to  provide  a   list  of

co-resident relatives or to  limit its reference to caretaker

relatives is,  arguably, ambiguous.   As we  explained supra,
                                                            

                             -26-
                              26

when we find  ambiguity we give  deference to the  considered

interpretation of the Secretary.  See Evans, 933 F.2d at 7.
                                           

          Even were we to  agree with plaintiffs' argument as

to  the  meaning  of  the  word  "relative,"  we  would still

encounter  the  problem  of conflict  with  the later-enacted

family filing rule when we place   607(B)(1)(B)(iv)  into the

context of the statutory scheme.  As we have held, the family

filing  rule  applies  to     607(a)  children.     The  rule

establishes a  uniform system  whereby need is  calculated on

the basis of the collective needs of the household.  Adopting

the plaintiffs'  reading of   607(b)(1)(B)(iv)  would lead to

the anomalous  practice of  assessing need collectively,  and

then splintering the family unit at the point of  determining

the  proper  AFDC  payment.   To  assess  need  based on  one

picture,  and  arrive  at   benefits  based  on  another,  is

unworkable and undercuts the  policy behind the family filing

rule.  See Bowen, supra Part I Section C (citing S. Print No.
                       

98-169  at 980) (noting  that one purpose  of the rule  is to

"ensure that the income of family  members that live together

and share expenses is recognized and counted available to the

family as a whole").                 

          Where  different provisions  of the  same statutory

scheme  are in tension, a  court should make  every effort to

construe  such provisions  so as  to achieve  consistency and

harmony.   See Atwell  v. Merit  Systems Protection Bd.,  670
                                                       

                             -27-
                              27

F.2d 272,  286 (D.C. Cir. 1981)  (provisions should, wherever

possible,  be construed to  achieve consistency); Citizens to
                                                             

Save  Spenser County  v. EPA,  600 F.2d  844, 871  (D.C. Cir.
                            

1979)   (duty   to  achieve   harmonization   of  conflicting

provisions).  To  the extent that the  issue is one  that has

the potential  for undermining  the policy behind  the family

filing rule, we  believe that  the Secretary is  in the  best

position to resolve the  conflict.  See Chevron, 467  U.S. at
                                               

844  (1984) (citing  United States  v. Shimer, 367  U.S. 374,
                                             

382, 383 (1961),  for the proposition  that the principle  of

deference  to  administrative  interpretations   is  followed

whenever a decision as  to the meaning of a  statute involves

reconciling  conflicting  policies).     Our  conclusion   is

buttressed by  the fact  that the  Secretary was  involved in

proposing  and drafting the family filing  rule.  See Gorrie,
                                                            

809  F.2d  at  514  (noting the  Secretary's  involvement  in

proposing  the legislation  for  the purpose  of establishing

rules about who must file together for AFDC); Bowen, 483 U.S.
                                                   

at 592, 593  n.5 (same);  St. Luke's Hosp.,  810 F.2d at  331
                                          

(counseling deference where the  Secretary was present at the

statute's  creation  and thus  is likely  to  be in  a better

position to know the intent of the enacting Congress). 

          Finally, we  observe,  as did  the district  court,

that it is not at  all clear that Congress has  addressed the

precise issue  presented; namely,  the  application of  these

                             -28-
                              28

distinct statutory provisions to the  particular situation of

families composed of both   606(a) and   607(a) children.  In

Chevron,  the Supreme  Court explained  that in  construing a
       

statute  courts  should  first  seek  to  ascertain  "whether

Congress  has  directly spoken  to  the  precise question  at

issue."  Chevron,  467 U.S. at 842.  Although  we do not take
                

the  command to mean that Congress must anticipate all of the

possible  scenarios  that might  arise  under  a statute,  we

believe  that  this  is a  case  in  which  deference to  the

interpretation of the Secretary  is especially warranted.  As

we  explained in  St. Luke's  Hosp., 810  F.2d at  331, "[a]n
                                   

implied delegation  of a law-declaring function is especially

likely where, as here, the question is interstitial, involves

the  everyday administration  of the  statute, implicates  no

special judicial  expertise, and is unlikely  to affect broad

areas of the  law."  Cf. Drysdale  v. Spirito, 689  F.2d 252,
                                             

261 (1st Cir. 1982) (counseling deference where  the issue is

interstitial,  and "imbued  with  administrative history  and

complexity").     

          The factors of ambiguity  in a statute, conflicting

statutory  provisions, and  a complex,  interstitial question

arising  in  the  daily  administration of  the  statute--all

counsel  deference to  the Secretary.   We  must only  assess

whether the  Secretary's interpretation is  permissible.   We

find that the Secretary's policy harmonizes the two statutory

                             -29-
                              29

provisions,  while  doing violence  to  neither individually.

The  Secretary sensibly applies  the family filing  rule.  In

reading     607(b)(1)(B)(iv)  to  require  the  deduction  of

unemployment   compensation  from   the  AFDC   payment,  the

Secretary  reasonably  effectuates  the will  of  Congress to

treat  AFDC as  a  supplement  to unemployment  compensation,

rather  than  treating  the   two  as  alternative  forms  of

assistance.  

          At   oral   argument,   both  parties   highlighted

inequities resulting from  the respective interpretations  of

the district  court and  the Secretary.   Under the  district

court's  reading,   families  which  contain  both     607(a)

children and   606(a) children receive a greater AFDC benefit

than that received by families who are composed entirely of  

606(a) children or entirely of   607(a) children.  Defendants

pointed  out that,  by carving  out two  units,  the district

court  effectively permits  one unit  to receive  the maximum

payment  of AFDC,  while the  other one receives  the maximum

payment  of unemployment compensation.  Plaintiffs emphasized

that under the Secretary's reading, families composed of both

   606(a)  and     607(a) children  receive  less  AFDC  than

families  composed only of    606(a) children.   Once AFDC is

characterized  in the  light of  its statutory  purpose as  a

supplement to  unemployment income, however,  it is  apparent

that the total  income going to families with both categories

                             -30-
                              30

of  children is no less than that  going to a   606(a) family

composed of the same number of persons.    

          We recognize  the hardship visited  on families  in

the  plaintiff  class,   whose  life  circumstances   changed

dramatically  following  the  unemployment  of  the principal

earner.  The income  going to the family unit was  reduced by

the onset of unemployment, and then was further diminished by

reduction of the AFDC payment  in the amount of  unemployment

compensation  received.   The impact  on the families  in the

plaintiff class of the HHS/DHS policies is exacerbated by the

way in which  Maine treats  the gap between  the standard  of

need and the maximum AFDC payment.  See discussion supra Part
                                                        

I, Section  A.  Maine's policy permitted  many families prior

to the  unemployment of  the principal  earner to  attain the

maximum AFDC  payment because the amount  of countable income

earned by the  principal earner fell within the gap.  See id.
                                                            

Maine's treatment of the gap, however, generally permits more

families  to live at a  higher level of  subsistence, and has

not been challenged by the plaintiff class.  

          In the end, we  must acknowledge that the Congress,

HHS and DHS are charged with the difficult task of allocating

limited funds  across a range of needy  families. Overall, we

believe  that the practical  implications of  the Secretary's

reading of the statute,  when viewed allocationally, are more

equitable than  those flowing from the  construction given by

                             -31-
                              31

the  district court.  The  decision of the  district court is

Reversed.  No costs. 
                   

                             -32-
                              32