

November 20, 1995
                United States Court of Appeals
                    For the First Circuit
                                         

No. 95-1230

          ANTHONY PARISI, II, A MINOR, BY HIS PARENT
            AND NATURAL GUARDIAN, LORRALEE COONEY,

                     Plaintiff, Appellee,

                              v.

               SHIRLEY S. CHATER, COMMISSIONER
                     OF SOCIAL SECURITY,

                    Defendant, Appellant.

                                         

                         ERRATA SHEET                                     ERRATA SHEET

The opinion  of this Court issued on November 8, 1995 is corrected
as follows:

On page 6, line 8: Replace "Parisi, Jr.'s" with "Anthony's";

On page 7, line  1, page 7, line 2,  and page 14, line 18: Replace
"Energy" with "Education".                                

                United States Court of Appeals
                    For the First Circuit
                                         

No. 95-1230

          ANTHONY PARISI, II, A MINOR, BY HIS PARENT
            AND NATURAL GUARDIAN, LORRALEE COONEY,

                     Plaintiff, Appellee,

                              v.

               SHIRLEY S. CHATER, COMMISSIONER
                     OF SOCIAL SECURITY,

                    Defendant, Appellant.
                                         

         APPEAL FROM THE UNITED STATES DISTRICT COURT

              FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. Robert E. Keeton, U.S. District Judge]                                                                
                                         

                            Before

                     Stahl, Circuit Judge,                                                     
               Campbell, Senior Circuit Judge,                                                         
                  and Lynch, Circuit Judge.                                                      

                                         

Steve Frank, Attorney,  United States Department of Justice,  with                       
whom Frank W.  Hunger, Assistant  Attorney General,  Donald K.  Stern,                                                                             
United States  Attorney, and  William Kanter, Attorney,  United States                                                    
Department of Justice were on brief, for appellant.
Sandra  L. Smales,  with whom  Raymond  Cebula  was on  brief, for                                                          
appellee.

                                         

                       November 8, 1995
                                         

         LYNCH, Circuit Judge.   In 1991 when Anthony Parisi,                     LYNCH, Circuit Judge.                                         

II  ("Anthony")  was  nine  years old,  the  Social  Security

Administration  reduced  the  amount  he  was  receiving   in

dependent child's benefits on  account of his disabled father

Anthony  Parisi ("Parisi") from $464 a month to $262 a month.

The purported justification for  the reduction is a provision

in the Social Security Act ("SSA") that sets a maximum amount

that can be paid out  on a single wage earner's account.   If

the  benefits paid  on  that account  exceed  the maximum,  a

reduction  is required to comply  with the cap.   The cap was

exceeded  in this case,  the agency says,  when Parisi's wife

(who is not Anthony's  mother and with whom Anthony  does not

live)  was  deemed "entitled"  under  one  subsection of  the

statute  to spousal  benefits on  Parisi's account.   Another

part of the same section of the statute,  however, prohibited

any portion  of those  benefits from  actually being paid  to

her.  The question is whether those spousal "benefits," which

were never actually payable, were properly counted toward the

family  maximum  cap.   We conclude  that  they were  not and

accordingly  affirm  the  district court's  reversal  of  the

agency's determination.

                    I.  Factual Background                                                      

         While married  to Adriana Parisi,  Anthony Parisi, a

fisherman,  had a  child, Anthony  Parisi, II,  with Lorralee

Cooney of Gloucester, Massachusetts.   Anthony lives with Ms.

                             -2-                                          2

Cooney, who has sole custody of him and brings this action on

his behalf.

         In February 1988, Parisi became disabled, and he and

Anthony, as his dependent,  started receiving payments on his

account as a wage  earner.1  In 1991, Adriana  Parisi applied

for  and became  eligible  for  early retirement  ("old-age")

benefits under the SSA based on her own wage-earner's record.

By  operation of  the statute,  she was  automatically deemed

also  to have applied for and to qualify for spousal benefits                

on Parisi's account.   See 42  U.S.C.   402(r)(1).   However,                                      

because the benefits to which Adriana was entitled on her own                                                                         

account exceeded the spousal benefits for which she qualified

on her husband's account, it was determined that she could be

paid benefits only on her own account.

         The  agency also  decided,  however,  that Adriana's

spousal benefits   even though not actually payable to her or

anyone  else    still  had to  be  counted toward  the  SSA's

statutory  limit (the "family maximum") on benefits available

on a single  worker's record.   Because the benefits  Anthony

was  already  receiving,  when  combined  with  Parisi's  own

benefits  and  Adriana's   (non-payable)  spousal   benefits,

exceeded  the  statutory maximum  amount, the  agency reduced

Anthony's  dependent  benefits.    Lorralee  Cooney   was  so

                                                    

1.  It  is  undisputed that  Anthony  was  and still  remains
entitled to  receive dependent child's benefits  on the basis
of Parisi's work record.

                             -3-                                          3

notified.  On reconsideration at Cooney's request, the agency

reaffirmed its decision to reduce Anthony's benefits.

         The  agency's  determination   was  appealed  to  an

administrative   law  judge   ("ALJ"),  who   concluded  that

Adriana's non-payable  spousal benefits should not be counted                                                              

toward the  family maximum.   The agency  appealed the  ALJ's

decision  to  the  Social  Security  Appeals  Council,  which

reversed  the  ALJ.    The  Appeals  Council's  decision  was

appealed to the district court.  See 42  U.S.C   405(g).  The                                                

agency  argued  that under  the  plain language  of  the SSA,

calculation    of   the    family   maximum    includes   all                                                                         

"entitlements," not just entitlements  that result in  actual

payment.  The  district court disagreed.   It concluded  that

the  SSA's "family  maximum"  cap on  benefits  was meant  to

include  only  "effective  entitlements"  (entitlements  that

result    in   some   actual   payment),   not   "conditional

entitlements,"  and  that  because  Adriana  Parisi's spousal

benefits were  only conditional (upon her  not being entitled                                           

to a larger benefit  on her own wage-earner's  account), they

were not properly counted toward the family maximum.

              II.  Relevant Statutory Provisions                                                            

         The  two statutory provisions primarily at issue are

42 U.S.C.   403(a) and 42 U.S.C.    402(k)(3)(A).  The former

contains the "family maximum" provision and the latter is the

provision that prevents  Adriana Parisi  from being  actually

                             -4-                                          4

paid  any  spousal benefits  on  the basis  of  Parisi's work

record (which she would otherwise have received under section

402(b)(1)).   Section  403(a) provides  in pertinent  part as

follows:

         . . . [T]he total monthly benefits to  which
         beneficiaries may be entitled under  section
         402 or 423  of this title for a month on the
         basis  of  the  wages  and   self-employment
         income  of  [an]   individual  [wage-earner]
         shall . . . be  reduced as  necessary so  as
         not  to  exceed [the  maximum amount  set by
         statute].

42 U.S.C.   403(a)(1).   And section 402(k)(3)(A) provides in

relevant part:

         If an individual  is entitled to an  old-age
         or  disability  insurance  benefit  for  any
         month and  to  any other  monthly  insurance
         benefit   for   such   month,   such   other
         insurance benefit for such  month, after any
         reduction  . . .  under  section  403(a)  of
         this title,  shall be reduced, but not below
         zero, by an amount equal to  such old-age or
         disability insurance benefit . . . .

42 U.S.C.    402(k)(3)(A).

         The parties  agree that, because  the monthly amount

of Adriana Parisi's  old-age benefits on her  own work record

exceeds the amount of  spousal benefits she could be  paid on                   

her    husband's    record    under     section    402(b)(1),

section 402(k)(3)(A) has  the result of reducing  to zero the                                                                     

payable amount of Adriana  Parisi's spousal benefits.  It  is

also agreed that Adriana's  own old-age benefits, as  well as

Parisi's benefits, are not subject to reduction under section                                      

403(a).    Thus  the  only  payable  benefits  at  stake  are

                             -5-                                          5

Anthony's.2  The  statutory issue  is whether  the amount  of

"total  monthly  benefits  to  which  beneficiaries   may  be

entitled" for  purposes of  section 403(a) must  include what

the monthly  amount of Adriana's spousal  benefits would have

been under section 402(b)(1) but for the operation of section

402(k)(3)(A)  of  the  statute.    If  Adriana's  non-payable

spousal  benefits   are  included   in  the   family  maximum

calculation,  then Anthony's benefits  were properly reduced.

If not, then the district court's judgment must be affirmed.

                       III.  Discussion                                                   

         Our analysis  begins with  the text  of the statute.

If the meaning  of the text is clear,  then that meaning must

be  given effect, unless it would produce an absurd result or

one manifestly  at odds  with the statute's  intended effect.

St.  Luke's Hosp. v. Secretary of HHS, 810 F.2d 325, 331 (1st                                                 

Cir. 1987).   If the  relevant text and  congressional intent

are ambiguous, then an  agency's reasonable interpretation is

entitled to deference.   See Chevron U.S.A.,  Inc. v. Natural                                                                         

Resources Defense  Council, Inc., 467  U.S. 837  (1984).   No                                            

deference, though,  is due  an agency interpretation  that is

inconsistent with  the language  of the statute,  contrary to

the  statute's  intended   effect,  arbitrary,  or  otherwise

                                                    

2.  The parties also agree that if  Adriana had actually been
paid   spousal  benefits   on   Parisi's   account,  then   a
corresponding reduction  in benefits for  Anthony would  have
been warranted under the family maximum provision.

                             -6-                                          6

unreasonable.   See Massachusetts  Dep't of Energy  v. United                                                                         

States Dep't of Education, 837 F.2d 536, 541 (1st Cir. 1988).                                     

A.  The Statutory Language                                      

         The  agency  claims  that  its  position  is plainly

supported  by  two aspects  of the  statutory text:  the term

"entitled"  in  section 403(a),  and  the  phrase "after  any

reduction   . . .   under    section   403(a)"   in   section

402(k)(3)(A).   We conclude that the statutory  text does not

support the intuitively troubling result urged by the agency.

         The Commissioner of Social Security ("Commissioner")

emphasizes that the family maximum is formulated on the basis

of entitlement, and that section 403(a) never speaks in terms                          

of  benefits actually  received.   Thus,  the argument  goes,

because subsection  (b)(1)  of  section  402,  considered  in

isolation, "entitles" Adriana Parisi  to spousal benefits  on

the  basis of her husband's SSA record, such benefits must be

included in  the family maximum calculation,  even though the

same  section of the statute just a few paragraphs later, see                                                                         

  402(k)(3)(A), operates to render those very benefits wholly

non-payable.                       

         The  Commissioner's   argument  is   strained,   and

certainly  not  dictated  by   the  statutory  text's   plain

language.  Section 403(a)(1)  of the SSA limits  and requires

the reduction  "as necessary" of the  "total monthly benefits

to  which beneficiaries  may  be entitled  under section  402                                                                         

                             -7-                                          7

. . . on the basis of the wages and self-employment income of

[the  wage-earner, here  Mr.  Parisi]."   42 U.S.C.    403(a)

(emphasis  added).   The agency's  claim that  section 403(a)

requires the  inclusion of  all "entitlements" in  the family

maximum  computation begs  the question  whether  a so-called

"entitlement"  created in  one  part of  section 402  that is

simultaneously prevented from  yielding any actually  payable

benefit  by another  applicable  portion of  section 402  can

properly be  deemed an  "entitle[ment] under section  402" at

all.3   We doubt that it can.   Indeed, even according to the

agency's own regulatory definition, a person is "entitled" to

a benefit only when that person "has proven his  or her right

to  benefits for  a period  of time."   20  C.F.R.   404.303.

Here, Adriana Parisi has "proven"  no right to benefits under                                                                         

section 402 (taken as a whole) for any period of time.                                                  

         We   need   not   decide,   however,   whether   the

Commissioner's understanding  of  the term  "entitlement"  is

somehow  supportable,  because  the agency's  argument,  even

taken  on its  own terms, does  not carry  the day.   For one

                                                    

3.  It would seem an unconventional usage at best to say that
Adriana  Parisi is  entitled  to benefits  which the  statute                                        
clearly disallows in her  case, leaving her with not  even an
expectancy  of receiving them.  Cf. Board of Regents v. Roth,                                                                        
408 U.S.  564, 576-77 (1972) (an entitlement, contrasted to a                                                        
mere expectancy, creates a property interest protected by the
Fourteenth Amendment); Goldberg v.  Kelly, 397 U.S. 254, 260-                                                     
66  &amp;  n.8  (1970)   (deprivation  of  statutory  entitlement                                                                         
triggers procedural  due process concerns); see  also Bell v.                                                                      
Burson, 402 U.S. 535, 539 (1971) (similar).                  

                             -8-                                          8

thing, the  claim that section 403(a)  is concerned primarily

with "entitlements" is not,  in fact, fully borne out  by the

actual  language of  the statute.   Section  403(a) places  a

limit  not on entitlements per  se, but rather  on "the total                                              

monthly benefits to which beneficiaries may be entitled under                                                                         

section 402 . . . ."  42 U.S.C.   403(a) (emphases added).  A                       

natural reading  of this  language suggests that  the primary

object of limitation is the "total monthly benefits" produced

by the operation  of section 402 as a whole,  and not, as the                                                       

Commissioner  argues, theoretical entitlements created by one

fragment  of section  402 considered in  artificial isolation

from the rest of that same section, and wholly apart from the

benefits that ultimately attach.  Here, the total benefits to                                                                      

which Adriana Parisi might be deemed "entitled" under section

402     when that  section is  considered  in its  entirety  

amount  to zero.   Hence,  Adriana's putative  benefits under                           

section  402 could  not possibly  contribute anything  to the

family maximum computation under section 403(a).

         In addition to requiring an unnatural reading of the

statute,  the Commissioner's  argument is  logically unsound.

Under the Commissioner's "pure entitlement" approach, section

403(a)  is  said to  place  a ceiling  on  pure entitlements,

regardless whether  any payable benefits attach  thereto.  If

the  total  amount  of  entitlements available  on  a  single                                                

worker's record  exceeds the  statutory limit, so  the theory

                             -9-                                          9

goes, a  reduction under section 403(a)  is required, whether

the  excess entitlements produce payable benefits or not.  On

the other  hand, the Commissioner  simultaneously claims that

when  the total  amount of  "entitlements" causes  the family

maximum cap to be  exceeded, it is the payable  benefits that                                                                    

are subject to reduction under the statute.  This position is

internally inconsistent.   If the thrust of section 403(a) is

to  place a limit on entitlements, it is contradictory to say                                             

that compliance with the  family maximum cap can be  achieved

through a reduction of  payable benefits.  Because  under the                                                    

Commissioner's  logic, an "entitlement"  is entirely separate

from the payable benefits (if any) that attach, it would seem

to  follow that a reduction  in benefits paid  could never be                                                         

effective to achieve compliance with the cap.

         We conclude that  the Commissioner's contention that

section   403(a)   is  concerned   purely   with  theoretical

entitlements,  irrespective of  whether any  actually payable

benefits attach thereto, is supported neither by the language

of the statute nor by reason.

         We  also  are  unpersuaded  by   the  Commissioner's

argument  to the  extent it  rests on  the phrase  "after any

reduction    . . .   under   section   403(a)"   in   section

402(k)(3)(A).   The  Commissioner contends  that this  phrase

specifically    instructs    that    the   reduction    under

section 403(a)  for  compliance   with  the  family   maximum

                             -10-                                          10

provision  be computed  before any  reduction is  taken under                                          

section 402(k)(3)(A),  and that,  therefore, for  purposes of

section  403(a), Adriana  Parisi's  spousal benefits  must be

treated (contrary to fact) as if they were fully payable.

         The Commissioner  reads  too  much into  the  phrase

"after any  reduction . . .  under section 403(a)."   Section

402(k)(3)(A) is triggered when  an individual who is entitled

to  old-age benefits on  her own  social security  record (as

Adriana  is in this case)  is also facially  entitled to some                                              

other simultaneous benefit (in this case, spousal benefits on

Parisi's  account).   In substance, section  402(k)(3)(A) has

the  effect  of authorizing  such  an  individual to  receive

payment of  the larger of the two  simultaneous benefits, but

not  both.4   Thus, section  402(k)(3)(A) requires  comparing

the size  of the beneficiary's  "other" benefit with  her own

old-age  benefit.   The  "after any  reduction under  section

403(a)"  language in  section  402(k)(3)(A) ensures  that, in

determining the amount of the "other" simultaneous benefit in

question,  the  calculation  will   take  into  account   any

reduction  to the  "other"  benefit that  would otherwise  be

required  under section  403(a).   This prevents  the old-age

                                                    

4.  More precisely, the provision entitles the beneficiary to
payment of  her old-age  benefit plus the  difference between                                                 
the  "other"  benefit  and   the  old-age  benefit,  if  that
difference is greater than zero.  This is the same  as saying
that  the beneficiary is entitled  to an amount  equal to the
larger of the two simultaneous benefits in question.

                             -11-                                          11

beneficiary from receiving, by operation  of the simultaneous

benefits  provision,  any  amount  of  benefits   that  would

otherwise be excluded as exceeding the cap imposed by section

403(a).5

         There  is  nothing   in  the  language  of   section

402(k)(3)(A) or  section 403(a), however, that  dictates that

the family  maximum computation cannot take  into account the

fact that  an entitlement  that would normally  contribute to

the  family maximum  amount  has  been  reduced  to  zero  by

operation of  the simultaneous benefits  provision of section

402(k)(3)(A).  It is true that the computation required under

section  402(k)(3)(A)  requires  a provisional  determination

whether  the  "other" simultaneous  benefit  (here, Adriana's

spousal benefits) would, if  payable, be subject to reduction

under section 403(a).  But this computation is only necessary

for the  purpose  of  determining what  portion  of  the  two

simultaneous  benefits the beneficiary  (Adriana) is entitled

to receive.   There is  no language in  section 402(k)(3)(A),

and  certainly  not in  section  403(a),  requiring that  the

                                                    

5.  Suppose,   for   example,    that   a   beneficiary    is
simultaneously entitled to receive her own old-age benefit of
amount  B and a  spousal benefit of  amount S.   Suppose also
that if the spousal benefit were payable, the family  maximum
cap would be exceeded,  and the spousal benefit (S)  would be
reduced by the  amount of the statutory  reduction, to amount
S(r).    The  "after   any  reduction"  language  in  section
402(k)(3)(A)  ensures that  the beneficiary  will receive  an
amount equal  to the larger  of B and  the reduced S(r),  not                                                                         
simply the larger of B and S.

                             -12-                                          12

family maximum  computation ignore the actual  results of the                                              

simultaneous benefits determination of section 402(k)(3)(A).

         To the contrary, the statutory language  suggests an

interplay  between  section 403(a)  and  section 402(k)(3)(A)

that  belies  the  position  advanced  by  the  Commissioner.

Section 403(a)  requires only such "reduc[tion]  as necessary                                                                         

so as not to  exceed" the family maximum.   The determination

of whether a reduction is necessary in this case depends upon

the  calculation of  the  "total monthly  benefits" to  which

Adriana Parisi "may  be entitled  under section  402" on  the

basis of her husband's SSA record.  As explained, that amount

is  zero.    Hence,  the relevant  "total  monthly  benefits"                    

available under section 402 on Parisi's work record (combined

with  Parisi's  own benefits)  do  not  exceed the  statutory

ceiling.  It cannot be "necessary," then, to reduce Anthony's

benefits.

         We  conclude that  the Commissioner's  position does

not follow  from the  plain language of  section 402(k)(3)(A)

and section 403(a).

B.  Legislative History                                   

         As the district court  observed, the  interpretation

urged  by the  Commissioner produces  a result  that Congress

apparently   sought  to   avoid.     The  most   illuminating

legislative  comments  are  found   in  connection  with  the

                             -13-                                          13

enactment of the  1949 amendments to  the SSA, which  changed

the previously existing family maximum provision:

         Under the  present  law,  the total  of  the
         family benefits  for a  month is reduced  to
         the  maximum  permitted by  section [403(a)]
         prior  to any  deductions on  account of the
         occurrence of  any  event specified  in  the
         law . . . .  Section [403(a)] as amended  by
         the   bill   reverses  this   procedure  and
         provides that  the  reduction in  the  total
         benefits for  a month  is to  be made  after
         the deductions.   As a result, larger family
         benefits will be payable in many cases.

S. Rep. No. 1669,  81st Cong., 2d Sess. (1950),  reprinted in                                                                         

1950  U.S.C.C.A.N. 3287,  3361.   After  this statement,  the

Senate  Report set forth a hypothetical scenario illustrating

that  under  the amendments  to  section  403(a), the  family

maximum provision  would not operate to reduce  a child's SSA

benefits on account of  a family member's nominal entitlement

to benefits that are not actually payable.  See id.                                                               

         Congress expressed an intent that section 403(a) not

operate to deprive a  dependent child of SSA benefits  on the

basis  of  theoretical entitlements  that  produce no  actual

benefits.     The   agency's  reading   of  the   statute  is

inconsistent with that intent.

C.  Regulatory Language                                   

         Our     conclusion    that     the    Commissioner's

interpretation of  the statute is inconsistent  with both its

text and intended effect  suffices, under Chevron, to obviate                                                             

any requirement of  deference to the agency's  position.  See                                                                         

                             -14-                                          14

Massachusetts  Dep't of  Energy, 837  F.2d at  541.   We add,                                           

however, as  a  capstone to  our  analysis, that  the  Social

Security Administration's  own regulations are  at odds  with

its  proposed construction  of the  statute.   The regulation

that  describes generally  the effect  of the  family maximum

provision explains its operation in this way:

         Family Maximum.   As explained in   404.403,                                   
         there  is  a  maximum  amount  set  for each
         insured   person's  earnings   record   that
         limits the  total benefits  payable on  that                                                        
         record.  If you are entitled  to benefits as
         the  insured's  dependent or  survivor, your
         benefits  may   be  reduced  to  keep  total                                                                 
         benefits  payable  to  the insured's  family                                      
         within these limits.

20 C.F.R.   404.304(d) (emphasis added).  The regulation that

more  specifically  describes  the operation  of  the  family

maximum provision contains similar language:

         The Social  Security Act  limits the  amount
         of  monthly benefits  that can  be  paid for                                                             
         any  month  based  on  the  earnings  of  an
         insured individual.

20 C.F.R.   404.403(a)(1) (emphasis added).

         The agency's  own  interpretative  regulations  thus

interpret the family maximum  provision as operating to limit

the  "amount  of  benefits that  can  be  paid"  on a  single                                                          

worker's account.  They do not state that section 403(a) caps

the total amount of  entitlements that might be available  on                                             

an   account.    That  the  agency  has  chosen  in  its  own

regulations  to  describe the  family  maximum  as placing  a

ceiling on  benefits paid or  payable casts further  doubt on                                                 

                             -15-                                          15

its  contention here  that section  403(a) is  concerned with

capping  pure  entitlements,  regardless  of  the  amount  of                                                    

payable benefits that attach.

         To  similar  effect is  language  contained  in  the

agency's   written   rulings   on   Anthony's   benefits   as

communicated to  Lorralee Cooney.   In the first  letter from

the Social  Security Administration  to Cooney  notifying her

that  her  son's  benefits  were to  be  reduced,  the agency

explained that the reduction was required because the statute

imposes  a "limit  on how  much we can  pay on  each person's                                                       

Social  Security record [emphasis  added]."  And  later, in a

letter    reaffirming    its    initial     decision    after

reconsideration, the  agency informed Cooney that  the family

maximum provision  "limits the  total amount of  the benefits

payable on an individual's earnings record."                   

         The regulations  and agency statements quoted  above

support  the  conclusion  we  adopt here,  namely,  that  the

"family  maximum"  provision of  section  403(a) operates  to

limit  only  those  benefits that  are  payable  on a  single                                                           

worker's account.

D.  Policy Considerations                                     

         We  observe,  finally,  that  the  purported  policy

reasons offered in support of the Commissioner's construction

of the statute lack persuasive force.

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         The agency says its  position prevents families from

receiving duplicative  or excessive benefits.   In this case,

the  Commissioner  asserts,  applying section 403(a)  in  the

manner suggested would  have the effect  of making the  total

amount  of benefits  payable  to the  "family unit"  (Parisi,

Anthony,  and Adriana)  roughly  the same  as  it was  before

Adriana became entitled to receive her own old-age benefits.

         The problem with  this rationale is twofold.  First,

the family maximum provision (despite its common appellation)

is written not as  a broad limitation upon the  amount that a                          

family  unit can receive in total SSA benefits, but rather as

a specific  limitation upon the amount  of benefits available

on the  basis of  a single  worker's record.   See 20  C.F.R.                                                              

  404.403(a)(1)  (explaining  that  section  403(a)  places a

maximum "for  each person's  earnings record that  limits the

total benefits  payable  on that  record" (emphasis  added)).                                                    

Adriana "earned" her old age  benefits through her own  years

in the work force,  not because she  was the wife of  Parisi.

The question under section 403(a) is not whether the family's                                                                       

benefits  have  exceeded a  certain  level,  but whether  the

benefits  payable  on  a single  wage-earner's  account  have

exceeded the statutory maximum.

         Second, the agency's suggestion  that the  reduction

of benefits  to Anthony prevents duplicative  payments to the

"family  unit" rings hollow.   Anthony lives with his natural

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mother, not with  Adriana and  Parisi.  The  agency does  not

suggest that  any portion  of Adriana's or  Parisi's benefits

reaches the child.   The agency's statement  that "the family

unit  continues  to receive  approximately  the same  overall

benefits as  it did before"  thus distorts reality.  In fact,

under the agency's interpretation, Anthony receives only half

the benefits he was receiving before; and because neither the

father's  nor Adriana  Parisi's own  benefits are  subject to

reduction under  the family maximum provision, it is only the                                                                     

child who has been adversely affected  by the agency's action

in this case.

         The other purported  policy justification offered in

defense of  the Commissioner's position is  that reduction of

the child's benefits in  this case is required to  uphold the

meaning  of  "entitlement."   The Commissioner  contends that

because section 403(a) places  a limit on "entitlements," and

because  Adriana Parisi  is  "entitled" to  spousal  benefits

under  one  subsection  of  the statute  (even  though  those

benefits  are not  payable),  failure to  include those  non-

payable  benefits in the family maximum tally will dilute the

meaning of "entitlement" under the SSA.

         We find  this reasoning  unpersuasive.   The flaw in

this  argument is the same  as the flaw  underlying its plain

meaning argument:  it incorrectly assumes that section 403(a)

is concerned  with  keeping  pure  "entitlements"  under  the

                             -18-                                          18

statutory limit.   To the  contrary, as  we concluded  above,

section 403(a)  operates  in this  case  to limit  the  total

amount of  benefits payable on a  single wage-earner's record                                       

under the relevant benefits provisions (read as a whole), not

to  limit  entitlements  theoretically  available  under  one

subsection of the statute considered in artificial isolation.

In   any  event,   although  this   conclusion  negates   the

Commissioner's  claim  that   Adriana  Parisi's   non-payable

spousal  benefits  must be  included  in  the family  maximum

calculation,   it   does    not   directly   undermine    the

Commissioner's purported definition of "entitlement,"  nor is

it  necessarily inconsistent  with saying  here  that Adriana

Parisi  has,  in some  abstract  sense,  an "entitlement"  to

spousal benefits  under section  402(b)(1) read  in isolation

from the rest  of section 402.   We hold only  that Adriana's

non-payable spousal benefits do  not count toward the section

403(a) "family maximum."

E.  Conclusion                          

         We  conclude   that  the   Commissioner's   proposed

construction  of  section  403(a)  is not  supported  by  the

language of the statute, is logically flawed, is inconsistent

with  the  statute's  intended  effect, is  contrary  to  the

agency's own interpretative regulations, and is not supported

by  any sound considerations  of policy.   Accordingly, we do

not defer to the Commissioner's position under the principles

                             -19-                                          19

of Chevron, and we hold that section 403(a) operates to limit                      

the total  amount of  benefits actually payable  on a  single                                                           

worker's record, not the amount of entitlements theoretically

available.6

         In this case, because Adriana Parisi's "entitlement"

under section 402(b)(1) to  spousal benefits on Parisi's work

record  produces zero  payable benefits  as a  result  of the                                          

operation  of  section  402(k)(3)(A),  no such  benefits  are

included  in the  computation required  under section 403(a).

Consequently,  the total  amount of  benefits payable  on the

basis of  Parisi's work  record does not  exceed the  maximum

imposed  by  the  statute,  and it  is  not  "necessary"  for

purposes of section 403(a) to reduce Anthony's benefits.  The

district court correctly reversed  the decision of the Social

Security Appeals Council.

         Affirmed.                             

                                                    

6.  Our reasoning differs from  that employed by the district
court.   The district  court's analysis distinguished between
"effective"   and   "conditional"    entitlements.       This
distinction, although sensible, has no roots in the statutory
language.   We  rely, instead,  on  the notion  that  section
403(a) places  a limit  not  upon non-payable  "entitlements"
created  by  an  isolated subsection  of  the  SSA,  but upon
payable benefits    in this case, the  total benefits yielded
by  section 402 of the SSA  read as a whole.   This notion is
semantically supported by the  statutory framework and by the
agency's own  regulations, which speak  specifically in terms
of payable benefits (e.g., 20 C.F.R.   404.304(d)).                                     

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