
USCA1 Opinion

	




          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.                                          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            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              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            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.                                         II.                                       Analysis                                       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            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                      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                      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                      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            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.             Reversed.  No costs.             ________   ________                                         -32-                                          32
