Court Opinion

ID: 9699888
Source: CourtListenerOpinion
Date Created: 2023-08-25 20:54:57.678669+00
Date Added: 2024-06-11T18:20:59.487139
License: Public Domain

CASSIBRY, District Judge
(dissenting) :
Suppose a school desegregation case. Six grades have been voluntarily integrated when the court orders that the entire system be unitized by July 1, 1969. The school board then resegregates the six grades already integrated, and contends this reversal is permitted because the court order has no effect until July 1, 1969. Would the court allow such a turnabout? Obviously not. Yet the majority permit just such an action in this welfare case. Louisiana, though under a Congressional mandate to increase payments to ADC families by July 1, 1969, is permitted to reduce ADC payments below the level in existence when Congress enacted the mandate. Finding no significant difference between the action of the school board and that of Louisiana, I dissent.1
This case involes the meaning and effect of section 402(a) (23) of the Social *347Security Act,2 which requires a state ADC plan to:
provide that by July 1, 1969, the amounts used by the State to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established, and any máximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted. ......
To me, this statute requires the states to increase ADC payments no later than July 1, 1969, in accordance with the change in the cost of living since the existing level of payments was established, and, prohibits any reduction in payments before that date. To my brethren, however, “it is obvious that ‘by July 1, 1969’ can only mean that the new state plans [providing the necessary increases] must go into effect as of that date and not before” (emphasis added), and that section 402(a) (23) can therefore have no effect on the states’ freedom to determine the levels of ADC grants until that date. Without taking issue with the majority’s logic, which is clearly not beyond reproach, we might better reveal the mistaken premise upon which it is based. For the majority’s bald assertion that section 402(a) (23) obviously has no operative effect before July 1, 1969, was not so obvious to the House-Senate Conference Committee, which reported out the provision noting that it could be satisfied by an appropriate adjustment “before July 1, 1969”, Conf. Rep. No. 1030, 90th Cong., 1st Sess. (1967), U.S. Code Cong. & Ad. News, pp. 3137, 3209 (1967) (emphasis added), nor to the Department of Health, Education, and Welfare, which .maintains in its amicus brief that a state could choose to comply with section 402(a) (23) earlier than July 1, 1969, and thus limit the time-span for rising living costs, nor to Texas, which has made the necessary adjustments effective May 1, 1969. Texas State Department of Public Welfare, Office Memorandum D-430 (Feb. 28, 1969). Furthermore, the majority’s reading of the effective date of the statute is not in accord with the very language used, for had Congress wished to make the provision applicable only after July 1, 1969, it would most certainly have used the term “effective” rather than “by”, as it in fact did in other provisions of the 1967 Amendments.3 Clearly, then, although section 402(a) (23) is not compulsory until July 1, 1969, it is operative as of the date of passage, January 2, 1968, in the sense that it may be satisfied by an appropriate adjustment at any time between these dates.
Doubtless Congress adopted this unusual procedure in order to meet the urgent need of ADC families for increased financial assistance as soon as practicable. Although the ADC program is to a large extent federally funded, it is the states that provide the balance of funds and set the level of payments, and any federal proposal for increased grants requires corresponding state legislative action adjusting legislatively imposed máximums and appropriating whatever additional funds might be necessary. Because some legislatures meet only every other year and would not hold sessions during 1968, the earliest possible date by which all states could comply with a mandated increase was July 1, 1969. Congress thus established this date as the outside deadline for compliance with section 402(a) (23). Cf. 113 Cong.Rec. S. 16817 (daily ed. Nov. 20, 1967); 113 Cong.Rec. S. 17017 (daily ed. Nov. 22, 1967). Recognizing, however, that the need for increased payments was immediate and not 1% years prospective, Congress framed section 402(a) (23) to *348permit states to enact appropriate increases before July 1, 1969, and still comply with the requirements of the statute.
If the states were indeed free to reduce ADC payments before July 1, 1969, Congress condoned actions not only inconsistent with its ultimate policy objective to raise ADC payments as soon as possible, but also contrary to its purpose for providing a iy2 year delay to allow the states time to act in furtherance of the statutory command. Applying “reason and common understanding to reach the results intended by the legislature”, Rathbun v. United States, 355 U.S. 107, 109, 78 S.Ct. 161, 163, 2 L.Ed.2d 134 (1957), such a condonation cannot be attributed to Congress.
But this is not the only way Congressional intent would be subverted if preJuly 1, 1969, reductions were permitted. For instance, a state intent upon inhibiting the cost effects of the statute could merely reduce ADC grants for the year and one-half prior to July 1, 1969, and effectively neutralize, for a limited time anyway, the cost it might incur from the post-July 1, 1969, increase in ADC payments. Accordingly, a ten percent reduction for the entire period before July 1, 1969, would nullify a ten percent cost of living increase through December 31, 1970. The possibility of larger reductions, while devastating to the sustenance of the recipients, is not at all unthinkable. Certainly Congress did not intend such reductions; they would sap the whole purport of the statute that after July 1, 1969, ADC recipients should be in a better overall financial position than they would have otherwise been in; they would encourage a state to subsidize the increases by only aggravating the very problem Congress sought to ameliorate; they would undermine Congress’ selection of the level of ADC payments on January 2, 1968, the date of enactment, as the benchmark for computing the size of the increases; and they would conflict with Congress’ determination that the existing level of ADC payments is im adequate and must be increased (not decreased) as soon as practicable. Moreover, even though the statute intends preJuly 1, 1969, increases, no state would be encouraged to implement such increases (thus keeping the cost of living increment at a minimum), because there is now a much simpler, more direct, and more effective method to limit the cost effects of the statute — simply reduce grants before July 1, 1969.
In sum, when Congress compelled the states to increase ADC payments for food, clothing, and shelter by July 1, 1969, it did not intend to allow them to avoid the impact of these increases by financing them in whole or in part by reductions in the existing allotments for these necessities of life in the meantime. Rather, Congress necessarily intended to maintain at least the status quo by setting a floor below which ADC payments could not be reduced, which is certainly the level of ADC payments on January 2, 1968, the base figure from which the increases required by section 402(a) (23) are to be determined. Though this prohibition on reductions is not expressly stated in the statute, it is necessarily implied, for any other conclusion is “plainly at variance with the policy of the legislation as a whole.” United States v. American Trucking Assns., Inc., 310 U.S. 534, 543, 60 S.Ct. 1059, 1064, 84 L.Ed. 1345 (1940). And “that which is implied in a statute is as much a part of it as that which is expressed.” United States v. Jones, 204 F.2d 745, 754 (7th Cir. 1953). The prohibition, therefore, should be suitably enforced.
In order to prohibit reductions in ADC payments in the interim period, section 402(a) (23) must require increases by July 1, 1969. Indeed, this is what its language purports to say. Yet defendants, along with the Department of Health, Education, and Welfare (HEW), which was invited to file a brief amicus curiae because of the relevance of its regulation interpreting section 402(a) (23), reject the plain meaning of the statute, and contend that it does not in fact require the increases its language *349clearly commands. The majority do not reach this question; they find it premature in the light of their conclusion that section 402(a) (23) is not operative until July 1,1969. While it obviously has to be considered in this dissent, the discussion must await an examination of the methods followed by Louisiana and the other states to determine the appropriate amount of ADC payments. For until one has an appreciation of these methods, the intended meaning and effect of section 402(a) (23) are not entirely apparent.
Setting forth these procedures might initially appear to be a difficult task for ADC grants vary widely in amount among the states and give the impression that no uniform system for allotting ADC payments is followed. But the differences among the states in the size of ADC grants result more from the states’ complete discretion to determine the needs standards of their deprived citizens and the extent to which they are met by assistance payments than from the use of different methods for computing the level of grants. Thus the basic allotment procedure is easily delineated.
Each state estimates its standard of need or assistance, which is the minimum monthly amounts required by its needy citizens for food, clothing, shelter, and other necessities. From this low-income budget, which varies according to the size of the family and is different in different states, each state deducts the income of the recipient, subject to allowable exemptions, leaving what is known as a budgetary deficit. In theory the budgetary deficit is the amount of the assistance payment, but in practice many states pay less by imposing arbitrary dollar máximums on the amount of aid paid, by paying only a fixed percentage of the budgetary deficit, or by a combination of both whereby a fixed percentage is paid but only up to a set dollar maximum. Of the fifty-four jurisdictions participating in the ADC program,4 twenty-four impose neither a percentage nor a dollar maximum, and pay the full budgetary deficit or 100 percent of need.5 Seven jurisdictions pay a percentage of the budgetary deficit, while four follow a variant and pay a percentage of the standard of need.6 Finally, twenty-six jurisdictions, including some which impose percentage reductions, place a legal or administrative dollar maximum on the amount that can be paid. Amounts are stipulated for each additional child, sometimes up to a family maximum expressed in a dollar amount, or cumulative amounts based on a given number of children are used, limited in terms of the number of children or a maximum payment. Louisiana follows this last system.
Louisiana pays the budgetary deficit up to the following máximums for each size family:
1 child $ 80.00 per month
2 children 99.00 “
3 children 116.00 “
4 children 133.00 “
5 children 145.00 “
6 children 163.00 “ “ (family maximum)
*350Louisiana’s plant to reduce ADC costs would cut each grant by ten percent, including those grants already limited by the arbitrary máximums set forth above. In the case of the individual plaintiffs Lampton and Williams, who support families of six or more, the proposed reduction means their maximum monthly payment will be cut from $163.00 to $146.70, while their recognized minimum standards of need remain unchanged at $212.-00 and $263.00, respectively.
“In the interpretation of statutes, the function of the courts * * * is to construe the language so as to give effect to the intent of Congress.” United States v. American Trucking Assns., Inc., supra. Although “our first reference is of course to the literal meaning of the words employed,” Flora v. United States, 357 U.S. 63, 65, 78 S.Ct. 1079, 1081, 2 L.Ed.2d 1165 (1958), our inquiry but begins there, for “all statutes must be construed in the light of their purpose.” Haggar Co. v. Helvering, 308 U.S. 389, 394, 60 S.Ct. 337, 339, 84 L.Ed. 340 (1940). In this case, however, the words of the statute leave little ambiguity regarding Congressional purpose, and thus have considerable force in and of themselves.
Section 402(a) (23) requires that “by July 1, 1969, the amounts used by the State to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established.” By enacting this provision, Congress meant to require the states to increase need standards. For in no state has the cost of living declined or even remained the same since the date of enactment; rather it has increased sharply. Nor is there any likelihood that Congress, in this time of rising price levels going back to the end of World War II, expected anything but such an increase. Furthermore, by the quoted language Congress meant to require the states to give full effect to changes in living costs since need standards were last established before January 2, 1968, when the provision was enacted into law. Thus a state could not reduce its need standards subsequent to January 2, 1968, and then adjust only for changes in living costs which occurred in the period after such reduction. This would be an obvious evasion of section 402(a) (23).
To determine the purpose served by this mandate to increase the standard of need, we need only refer to the universal use of the standard of need as the base fo.r,computing the level of ADC recipient grants, and the remaining language of section 402(a) (23), which provides that along with the necessary cost of living changes in need standards, “any máximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted.” ADC payments in all states are predicated upon the need standard; if this standard is increased, as section 402(a) (23) requires, the budgetary deficit must also increase accordingly. In those states paying the budgetary deficit in full, as well as in those states that pay only a percentage of the budgetary deficit (or the standard of need), section 402(a) (23) necessarily requires increased ADC grants corresponding to the increase in the standard of need, for a percentage maximum (100 percent or less) kept constant automatically translates increased need into an increased payment. Similarly, in those states imposing an arbitrary dollar maximum on the size of the assistance grant, section 402(a) (23), by requiring that the máximums imposed be adjusted in accordance with the change in the cost of living, insures increased grants for all recipients. Regardless of which system of computing ADC payments the state follows, section 402(a) (23) is therefore designed to effectuate increased ADC recipient grants. The language of the statute could not be any clearer.
Equally clear is the legislative history of section 402(a) (23), which, although in no wise substantial, nonetheless unequivocally delineates Congress’ intention to compel the states to raise ADC payments.
*351Section 402(a) (23) had its genesis before the Senate Committee on Finance as a proposed amendment by HEW to H.R. 12080, 90th Cong., 1st Sess. (1967), the Social Security Amendments as passed by the House of Representatives. The amendment called for the states to meet need in full as they determined it, and required that the states update their need standards to reflect current prices, and review these standards annually and modify them in accordance with* significant changes occurring in the cost of living.7 Hearings on H.R. 12080 Before the Senate Committee on Finance, 90th Cong., 1st Sess., pt. 1, at 635 (1967) [hereinafter Hearings]. Like provisions were suggested for the adult categorical assistance programs.8 Hearings, pt. 1, at 634-37. These amendments were designed to meet the problem of inadequate and unrealistic assistance payments by compelling increases in the level of payments in all categories.9
Although the Committee extensively modified the far-reaching HEW proposals, the provisions reported out and adopted by the Senate, which were discussed in the Section-by-Section Analysis contained in the Senate Report under the heading “Increasing Income of Recipients of Public Assistance,” were doubtless intended to ameliorate, though to a lesser degree, the same problem- — the low level of assistance grants — in the same manner — requiring the states to increase payments. S.Rep. No. 744, 90th Cong., 1st Sess. (1967), U.S. Code Cong. & Ad. News, pp. 2834, 3132 (1967).
The Committee bill rejected the HEW recommendation that the states meet needs in full as they determine them. But it did incorporate the annual cost of living adjustment for the ADC program,10 and substitute in the adult programs a one-time mandatory average increase of $7.50 per month in the amount of assistance,11 S.Rep. No. 744, 90th *352Cong., 1st Sess. (1967), U.S. Code Cong. & Ad. News, pp. 2834, 3132 (1967), a change designed to assure that all non-ADC recipients would benefit from the increases.12 The Senate passed these provisions without amendment,13 and sent the bill to a Senate-House Conference Committee to iron out the differences. In the Conference Committee the mandatory $7.50 increase for the adult categories was replaced by a $7.50 disregard of income provision discretionary with the states. (This allows a state, if it chooses, to disregard $7.50 of income when computing the budgetary deficit. The previous figure was $5.00 per month.) Conf.Rep.No. 1030, 90th Cong., 1st Sess. (1967), U.S. Code Cong. & Ad.News, pp. 3179, 3208-09 (1967). No similar change was made in the ADC provision; it remained mandatory upon the states. But the Conference Committee did not leave the Senate provision requiring increases unscathed, for the annual cost of living adjustment was deleted, thus leaving only a one-time cost of living adjustment before July 1, 1969. Id.
Notwithstanding these Conference Committee modifications, it is manifest that the intendment of the Finance Committee and the Senate survived at least with respect to the ADC provision, and that Congress undoubtedly meant what it said in section 402(a) (23) when it required the states to raise ADC payments. Clearly the course of the provision from its inception before the Senate Committee on Finance until its final passage by Congress allows no other conclusion. That this abrupt shift in Congressional policy, which for approximately thirty-five years had allowed the states complete freedom to determine the level of assistance grants, was unaccompanied by extensive committee reports, floor debates, and cost estimates is immaterial when, as here, the Congressional purpose to make such a shift is otherwise clearly discernible. “A restrictive interpretation should not be given a statute merely because Congress has chosen to depart *353from custom * * *.” United States v. Sullivan, 332 U.S. 689, 693, 68 S.Ct. 331, 334, 92 L.Ed. 297 (1948). However significant the departure may be, the duty of the court “to search out and follow the true intent of the legislature, and to adopt that sense of the words, which harmonizes best with the context, and promotes in the fullest manner the apparent policy and objects of the legislature” remains the same. United States v. Winn, 28 Fed.Cas. 733, 734 (No. 16,740) (C.C.D.Mass.1838) (Story, J.), quoted approvingly in Johnson v. Southern Pacific Company, 196 U.S. 1, 18, 25 S.Ct. 158, 162, 49 L.Ed. 363 (1904).
In its amicus brief, HEW rejects the foregoing analysis of the language and history of section 402(a) (23). According to HEW, the provision does not require increased ADC payments because Congress has intentionally “left open” a method whereby the states can avoid the ostensible effect of the statute to raise payments. This method is set forth in section 233.20(a) (2) (ii) of its Regulations, 45 C.F.R. § 233.20(a) (2) (ii), 34 Fed.Reg. 1394 (Jan. 29, 1969). The Regulation states in pertinent part that a state plan for ADC must:
provide that by July 1, 1969, the State’s standard of assistance for the AFDC program will have been adjusted to reflect fully changes in living costs since such standards were established, and any máximums that the State imposes, on the amount of aid paid to families will have been proportionately adjusted. * * * In the event the State is not able to meet need in full under the adjusted standard, the State may make ratable reductions in accordance with subparagraph (3) (viii) of this paragraph.* Nevertheless, if a State maintains a' system of dollar máximums, these máximums must be proportionately adjusted in relation to the updated standards.
HEW promulgated this regulation on January 28, 1969, to guide the states in their compliance with section 402(a) (23) and to “make it clear that while States must update their standards, if the States do not have the money to pay according to such standards they may make a ratable reduction * * *.” 34 Fed.Reg. 1394 (January 29, 1969).14 By a ratable reduction HEW means that a state may reduce the need standard by whatever percentage it chooses, and then compute the level of ADC grants from this reduced basis, which necessarily leads to a lower grant than that resulting from the application of the provisions of section 402(a) (23). For example, states formerly paying 100 percent of need (usually up to an arbitrary maximum) could add the cost of living increase required by section 402(a) (23) to the standard of need (and adjust their máximums accordingly), and then change and pay a lesser percentage of the increased need, while states paying less than 100 percent of need could make the necessary cost of living adjustment and then pay a still lesser percentage. Thus, while the standard of need and dollar máximums 15 remain at the increased levels *354mandated by Congress, a state, by following the percentage reduction procedure, could avoid in part or obliterate completely the otherwise necessary and inexorable effect of section 402(a) (23) to raise the level of recipient grants.16
In support of its position, HEW principally contends that Congress having devoted so little attention to section 402(a) (23), it should be interpreted literally to mean no more than its words themselves provide. Accordingly, since the provision commands adjustments only in the standard of need and dollar máximums, and does not refer to the percentage reductions permitted in the regulation, it should not be read to preclude them17 In other words, HEW seeks to infer a Congressional sanction of percentage reductions from the failure to mention them in section 402(a) (23). However, because a percentage maximum kept constant automatically transfers the increase in the standard of need into an increased payment, it is not at all surprising that Congress did not refer to percentage reductions in section 402(a) (23); there simply was no need to in order to achieve the desired increases. Therefore, to translate this omission into an implied Congressional sanction of percentage reductions is unwarranted.
Furthermore, a percentage reduction reduces the necessary effect of the standard of need as effectively as a dollar reduction, which HEW admits “would fly in the face of the statutory requirement [to update the standard of need], and cannot be accepted.” By both methods the result is a decreased standard of need which leads to a decreased assistance payment. Ever mindful that “That which we call a rose, by any other name would smell as sweet”,18 I must therefore conclude that if a dollar reduction in the standard of need is precluded by implication by section 402(a) (23), a percentage reduction likewise is prohibited.
Finally, the HEW interpretation of section 402(a) (23) cannot be accepted for it nullifies the effectiveness of the provision, and a court will “not suppose that Congress intended to enact unnecessary statutory amendments”, Uptagrafft v. United States, 315 F.2d 200, 204 (4th Cir. 1963), or presume “that the legislature intended any part of a statute to be without meaning.” General Motors Ac*355ceptance Corporation v. Whisnant, 387 F.2d 774, 778 (5th Cir. 1968). Attempting to avoid this conclusion, HEW submits four “significant” effects that the statute would have even under its narrow construction. These involve (1) expansion of the number of individuals eligible for ADC payments because of the increased standard of need, (2) more realistic need standards, (3) increase of dollar máximums, and (4) encouragement of the states to use the more equitable and less arbitrary percentage reductions rather than dollar máximums to reduce the cost of the ADC program. Hardly significant and obviously incidental, these effects cannot be used to camouflage the positive purpose of the statute to raise the level of ADC payments for all recipients. If Congress had solely wished to expand the number of individuals eligible for ADC payments, would it have enacted in the very same bill a provision likely to do just the opposite — the limitation on federal matching funds ?19 If Congress had meant more realistic need standards, would it have legislated a percentage increase from what in many cases was an unrealistic standard to begin with ?20 If Congress had intended to increase máximums, would it have required changes in need standards as well ? And finally, if Congress had meant to effect a shift from the use of máximums to percentage reductions, would it have so beclouded its intent in a maze of increases and reductions?
It is clear, therefore, that the HEW regulation permitting a ratable reduction in the standard of need is violative of the controlling federal statute, and consequently is invalid. King v. Smith, 392 U.S. 309, 333, 88 S.Ct. 2128, 2141, 20 L.Ed.2d 1118 (1968). While I am fully cognizant that the views of an administrative agency should be given due deference when issues of statutory interpretation arise, Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 801, 13 L.Ed.2d 616 (1965), “[t]he administrative ruling in this case was no sooner made than challenged. We cannot be certain how far it was determined by the considerations advanced * * * in its defense in this case. It has hardly seasoned or broadened into a settled administrative practice. * * * [And I] do not think it should overweigh the considerations * * * set forth as to the proper construction of the statute.” Davies Ware*356house Co. v. Bowles, 321 U.S. 144, 156, 64 S.Ct. 474, 481, 88 L.Ed. 635 (1944).
In conclusion, I have found that section 402(a) (23) not only requires the states to raise ADC grants by July 1, 1969, but also necessarily prohibits the states from reducing their grants before that date. Clearly, then, Louisiana’s proposed reduction in ADC payments is inconsistent with the terms and conditions imposed by the federal government upon those states voluntarily participating in this federally-funded program.21 I would enjoin the reduction. King v. Smith, supra.
As I would decide for plaintiffs on the basis of section 402(a) (23), I do not reach plaintiffs’ constitutional arguments.

. Both the Constitution and the statute require a certain result — full desegregation of schools and more money for ADC families. But just as the Supreme Court has recognized the need to delay application of the Constitutional.mandate to enable the school boards to overcome the practical problems of desegregating a dual school system, Brown v. Board of Education II, 349 U.S. 294, 75 S.Ct. 753, 99 L.Ed. 1083 (1955), so Congress, as will be shown infra at 338, has reeognized the need to delay application of the statutory mandate to enable the states to legislate the measures required to implement the increases. In both cases, then, additional time was' needed as a practical necessity before the intended results could be implemented. And in both cases it is the same inference that prohibits action retarding attainment of the ultimate goal. Neither the Constitution nor the statute intends that there should be a regression in the level of de*347segregated schools or ADC payments during tlie interim period set aside for compliance with the mandates requiring increases in these levels. The result should be the same in both.

. 42 Ü.S.C.A. § 402(a) (23) (Supp.1909). This section was added to the Act by section 213(b) of the Social Security Amendments of 1967, 81 Stat. 898.

. E. g., section 205(a) of the Social Security Amendments of 1967, 81 Stat. 892. This amendment added section 402(a) (20) to the Social Security Act, 42 U.S. C.A. § 602(a) (20) (Supp.1969).

. The following information about the administration of ADO programs in the various jurisdictions was provided in appendices to a brief amicus curiae submitted by the Department of Health, Education, and Welfare. It is as yet unpublished and was prepared by the National Center for Social Statistics, Social and Rehabilitation Service (HEW).

. Payment of full need, however, does not necessarily indicate greater concern for needy citizens by these states, for states which pay full need may well have unrealistic need standards.

. Under this variant, income is deducted after the percentage is applied to the standard of need, and the state pays the deficit.

. The text of the proposed amendment follows:
“[each state plan must provide] (A), effective July 1, 1969, for meeting (in conjunction with other income that is not disregarded, or set aside for future needs, under the plan and other resources) all the need, as determined in accordance with standards applicable under the plan for determining need, of individuals eligible to receive aid to families with dependent children (and such standards shall be no lower than the standards for determining need in effect on January 1, 1967) and (B), effective July 1, 1968, for an annul review of such standards and (to the extent prescribed by the Secretary) for updating such standards to take into account changes in living costs;”.
Hearings on H.R. 12080 Before the Senate Comm, on Finance, 90th Cong., 1st Sess. pt. 1, at 635 (1967).

. These programs are: Old Age Assistance and Medical Assistance for the Aged, 42 U.S.C. §§ 301-306; Aid to the Blind, 42 U.S.C. §§ 1201-1206; Aid to the Permanently and Totally Disabled, 42 U.S.C. §§ 1351-1355; Aid to the Aged, Blind or Disabled or for such Aid and Medical Assistance for the Aged, 42 U.S.C. §§ 1381-1385.

. Testifying in support of the proposed additions to the House bill, Secretary of HEW John W. Gardner and Under Secretary Wilbur J. Cohen documented the inadequacy of assistance payments, especially in the ADC program, and attributed this principally to the states’ desire to limit their financial responsibility. Hearings, pt. 1, at 216 (testimony of John W. Gardner) ; Hearings, pt. 1, at 255-259 (testimony of Wilbur J. Cohen).

. The Committee provision required a state plan for ADC to provide that:
“by July 1, 1969, and at least annually thereafter, the amounts used by the State to determine the needs of individuals will have been adjusted to reflect fully changes in living costs since such amounts were established, and that any máximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted.” (emphasis added).
Except for the emphasized language which was deleted by the Conference Committee, this provision parallels that enacted by Congress.

. The Committee provision required that non-ADC plans must:
“provide that the standards used for determining the need of applicants and recipients for and the extent of such assistance under the plan, and any maximum on the amount óf assistance, *352will have been so modified that an increase in the amount of assistance and other income will not be less than $7.50 per month per individual * * * above such amount of assistance and other income available under the standards and maximum applicable under the plan on December 31, 1966.”

. Since many of the recipients of aid in the adult categories also receive social security benefits, had the cost of living mechanism been used, the intended increase in assistance payments would have been offset for those individuals who are dual beneficiaries by the increase in social security benefits provided by H.R. 12080. (Social security benefits are considered income and serve to reduce the budgetary deficit, which means a reduced assistance grant.) By assuring each recipient an increase of $7.50 per month in his total amount of assistance and other income, this provision avoids any such offsetting effects. Naturally, this device need not have been employed to assure increased grants in the ADC program, because most ADC recipients do not receive social security benefits. Thus, in this program the cost of living adjustment proposed by HEW could be retained. S.Rep. No. 744, 90th Cong., 1st Sess. (1967), U.S.Code Cong. & Ad. News pp. 2834, 3006-07 (1967). See also 113 Cong.Rec.S. 16642 (daily ed. Nov. 16, 1967) (remarks of Senator Ribicoff) ; 113 Cong.Rec.S. 17036 (daily ed. Nov. 22, 1967) (remarks of Senator Randolph).

. Senator McGovern proposed the only amendment to section 402(a) (23). It would have substituted a $4.00 per month per individual increase in ADC payments for the cost of living adjustment in need standards. The announced purpose of the amendment was to raise ADC payments, which are considerably lower than those in the adult programs, by the same percentage (eleven percent) as the $7.-50 increase in the adult programs. 113 Cong.Rec. S 16963 (daily ed. Nov. 21, 1967) (remarks of Senator Mansfield, who introduced the amendment on behalf of Senator McGovern). In other words, the amendment was designed to insure that in all states — even those where only marginal increases in the cost of living had occurred — ADC recipients obtained the same guaranteed eleven percent increase in their assistance payments as was provided for the adult recipients. The amendment was rejected. Id. at S 16964.

 This subparagraph is merely a reminder that such a reduction must he applied statewide. A state plan must:
“Provide that payment will be based on the determination of the amount of assistance needed and that, if full individual payments are precluded by máximums or insufficient funds, adjustments will be made by methods applied uniformly statewide.”
45 C.F.R. § 233.20(a) (3) (viii), 34 Fed. Reg. 1395 (Jan. 29, 1969).

. The regulation dealing with section 402 (a) (23) was first promulgated in the HEW Interim Policy Statement No. 4, 33 Fed.Reg. 10230 (July 17, 1968). In its initial form the regulation simply restated the statutory provision, thus giving no indication that the effect of the statutory command could be avoided by a ratable reduction.

. To emphasize that máximums must indeed be proportionately adjusted in relation to the repriced standard of assistance, and that they could not be adjusted and then reduced because of inadquate funds pursuant to section 233.-20(a) (3) (viii) of the Regulations, supra at 353, the last sentence was added to the regulation interpreting section 402(a) *354(23). Thus, if funds were inadequate, ratable reductions could be made in relation to the standard of assistance only, not in relation to the máximums. Needless to say, the effect on the level of recipient grants is the same; they are reduced. But, according to HEW, the language of section 402(a) (23) permits one and i>rohibits the other.

. The Texas experience is instructive. From paying 100 percent of need for a family of four, up to a dollar maximum of $102.00, the state, in accordance with the HEW regulation, reevaluated the need standards and substituted a percentage maximum of fifty percent. See Texas Department of Public Welfare, Office Memorandum E-430 (Feb. 28, 1969) (effective May 1, 1969). A family of four with a typical calculated need of $180.00 will now receive a monthly payment of $90.00. Prior to imposition of the fifty percent maximum, the same family would have received $102.00. The Texas policy is currently being challenged as violative of section 402(a) (23) in Jefferson v. Hackney, Civil Action No. 3-3012-B (N.D.Tex., Dallas Division). No decision has yet been rendered. Similar suits are also pending in Florida and New York.

. Underlying this argument is the premise that the statutory directive that “any máximums that the State imposes on the amount of aid paid to families will have been proportionately adjusted” refers only to dollar máximums and not to percentage reductions, though the latter is certainly a maximum “on the amount of aid paid” in the same sense as a dollar maximum, for both have the same practical effect of limiting the size of the grant by an arbitrary amount. I find the premise valid. Although “maximum” could mean both dollar and percentage máximums, the term is qualified by the requirement that such máximums be proportionately adjusted in accordance with the adjustment in the standard of need, a requirement certainly inapplicable to a percentage maximum since it need only remain the same to lead to an increased grant, which therefore suggests that the term refers to dollar máximums only.

. Shakespeare, Borneo and Juilet, Act II, Scene 2.

. Section 208(b) of the 1967 Amendments added section 603(d) (1) of the Social Security Act, 42 U.S.C.A. § 603 (d) (1) (Supp.1969), which sets a limitation on Federal financial participation in the ADC program related to the proportion of the child population under age eighteen aided because of the absence from the home of a parent. Federal financial participation would not be available for any excess above the percentage of children of absent parents who received aid to the child population under age 18 in the state as of January 1, 1968. Though initially effective after July 30, 1968, the amendment was amended on June 28, 1968, Pub.L. 90-364, 82 Stat. 273 (1968), to be effective after July 1, 1969.
This limitation on federal funds was designed to induce the states to tighten their eligibility standards, and is therefore likely to restrict the expansion of the ADC program to encompass the marginal families whose income is only slightly above the need amounts. H.Rep. No. 544, 90th Cong., 1st Sess., at 110 (1967). Thus the implied notion that section 402(a) (23) was designed to expand the number of families receiving ADC is clearly at odds with the expressed policy underlying the freeze on ADC funds, and cannot be accepted as the objective of section 402(a) (23). In passing, it should be noted that the ADC freeze is entirely consistent with an interpretation of section 402(a) (23) requiring the states to increase the level of ADC grants. While one restricts the expansion of assistance to marginal recipients, the other requires only that the states increase payments to those already eligible to receive assistance under existing standards.

. In his testimony before the Senate Committee on Finance, Under Secretary Wilbur J. Cohen noted that the lowest need standard set by any state for a family of four receiving ADC is $131.00, while most state standards for such a family range between $150.00 and $250.-00. Hearings, pt. 1, at 259.

. “There is of course no question that the Federal Government, unless barred by some controlling constitutional prohibition, may impose the terms and conditions upon which its money allotments to the States shall be disbursed, and that any state law or regulation inconsistent with such federal terms and conditions is to that extent invalid.” King v. Smith, 392 U.S. 309, 333, n. 34, 88 S.Ct. 2128, 2141, n. 34, 20 L.Ed.2d 1118 (1968).