Dorothy McInnis v. Caspar W. Weinberger, 530 F.2d 55, 1st Cir. (1976)
Dorothy McInnis v. Caspar W. Weinberger, 530 F.2d 55, 1st Cir. (1976)
2d 55
Resolution of the statutory issue involves threading our way through a sequence
of statutes enacted to accomplish significant changes in the administration of
welfare assistance to the aged, blind and disabled.2 In January, 1974, the system
of federal matching grant programs for these recipients3 was replaced by SSI-the fundamental provision of which is a federal guarantee of a uniform
minimum monthly income.4 Encouragement to the states to supplement this
federal payment,5 with federal administration of the supplement,6 was
contained in 42 U.S.C. 1382e(d), providing for the federal government to
assume all administrative costs, and in P.L. 92--603, 401, codified at 42
U.S.C. 1382e note, allowing federal reimbursement of certain state assistance
expenditures. Specifically, 401 provides that the states will be 'held harmless'
for any increase in annual state expenditures over 1972 assistance expenditures,
to the extent that the current payment level does not exceed the 'adjusted
payment level' (APL)--defined (by 401(b)(1)) as the relief an otherwise
indigent recipient would have received under the categorical programs in effect
in the state during January, 1972. Congress thus sought to alleviate state fears
by absorbing costs which might arise due to the change to an income
maintenance approach, federal administration, and uniform federal eligibility
standards, while at the same time not funding increased benefit levels which the
states might choose to provide. See H.Rep.No.92--231, 1972 U.S.Code Cong.
& Admin.News at 5187; Irizarry, supra at 1149--50; California Legislative
Council, supra at 219--20.
The original legislation also declared that SSI recipients would be ineligible for
food stamps, P.L. 92--603, 411(a), and correspondingly encouraged states to
counteract that loss by offering to raise the ceiling on federal reimbursement
('hold harmless') to include annual cost excesses over 1972 to the further point
where the current benefit level did not exceed the 'maximum APL'--the APL
augmented by 'an amount which does not exceed the sum of (A) . . . and (B) the
bonus value of food stamps in such State for January 1972.' P.L. 92--603,
401(b)(1).7
However, few states planned to take advantage of this provision, 8 with the
threatened result that SSI recipients generally would receive neither food
stamps nor a cash equivalent.9 Congress' ultimate solution to this problem,10 on
the eve of the program's implementation,11 was to restore food stamp eligibility
except in those states in which the level of payments had been found by the
Secretary of Health, Education and Welfare 'to have been specifically increased
so as to include the bonus value of food stamps.' P.L. 93--233, 8(a)(1). It also
withdrew from states which had not yet made such a 'specific increase' the
option of receiving augmented reimbursement for doing so. 8(d--e). And in
8(c) Congress declared that the level of a state's payments 'shall be found by the
It is also true, however, that during the summer and fall of 1973, Massachusetts
implemented two statutorily mandated cost-of-living increases, by virtue of
which the benefit level as of December, 1973, had grown to more than $7
above the January, 1972, level. 15 Thus, the cash increase from the end of the
old programs to the start of the new ranged from zero to $2.90; and with the
end of the food stamp eligibility, the net effect was a substantial reduction in
purchasing power for the plaintiff class. Citing Rosado v. Wyman, 397 U.S.
397, 90 S.Ct. 1207, 25 L.Ed.2d 442 (1970), the plaintiffs argue that
Massachusetts duplicitously told its citizens that it was giving them cost-ofliving increases and then turned around and illegitimately used those increases
to cut off the food stamp program. They further charge that the words of
8(a) and (e)--'specifically increased so as to include the bonus value of food
stamps'--represent a requirement that the state demonstrate an intention
specifically to replace the lost bonus value of food stamps by means of the
increased cash benefit.
least, awkward. We think the more likely reading of the phrase is, 'increased by
a specific amount'. If Congress had wished to incorporate a specific intent test,
it would have made more sense to say 'increased specifically to replace'.
Instead, the provision reads, 'specifically increased so as to include'. (Emphasis
supplied.) This language is more consistent with a test directed to the effect of
the increase than to its purpose.
Moreover, 8(c), beginning with 'For the purpose of ( 8(a)(1) and (e))', sets
forth what appears to be a comprehensive definition of 'specifically increased'
rather than simply an added requirement. Under this subsection those states
which had planned, prior to October 1, to raise their payment level in reliance
on 401, and which in fact made payments at that level in January large
enough to invoke reimbursement, qualify as having specifically increased their
benefits. By defining specific increase in terms of 401, section 8(c) also
makes it clear that the amount from which the increase was to be measured was
the January, 1972, payment level. No intent requirement relating to replacement
of food stamps exists in 8(c), and it would be strange to define 'specifically
increased' so fully there while leaving to implication from 8(a)(1) a further
definitional requirement of such potential importance as the one plaintiffs
suggest.16
10
Not until the last days of December, 1973, with the enactment of P.L. 93--233,
8, could an argument be made that the specific intent with which a state had
acted or the designation accompanying its action was important. While the idea
of requiring a specific intent test seems highly unorthodox to us in this kind of
public welfare planning situation, we find bizarre the suggestion that Congress
would have provided here for a retroactive specific intent or designation test.17
No purpose for such a requirement suggests itself. The original goal of 401
had been for the initial payment level under the new program to reflect at least
the January, 1972, categorical grant level plus a cash equivalent to food stamps.
It sufficed under 401 that the money was provided--what the state called it
did not matter to the 1972 Congress. There is no reason to believe that the 1973
Congress felt differently. Most states had not taken the bait and raised levels;
recipients in those states were restored to food stamp eligibility. As to the five
states which had fully cooperated with the Congressional plan, we can discern
no reason why Congress would have wished to pull the rug out from under
those which, fortuitously, had not designated the cash increase as a food stamp
substitute. The greater likelihood is that Congress needed time to reflect upon
how the programs should mesh, and, recognizing that funds had already been
allocated,18 wished to preserve in the interim the status quo for those states
which had taken advantage of 401.19
11
Plaintiffs suggest that our view is contradicted by the actions of California and
New York, states which they say satisfied a specific intent test. But the
experience of these states seems to us to demonstrate precisely the opposite.
From the facts revealed by California Legislative Council for Older Americans
v. Weinberger, supra, California had increased its benefit level by $12 (more
than its $10 food stamp bonus value) even before 401 was passed, 375
F.Supp. at 229 note 27. No other increase being mentioned, it appears that the
maximum APL for that state did not include an amount specifically intended to
replace its recipients' loss of food stamps.20 And in that case, it was agreed that
the content of 'specifically increased' had been satisfied; only the timing under
8(c) was contested.
12
While the New York legislation contained the phrase 'in lieu of food stamp
bonus value', N.Y. Social Services Law 131--a(8) (McKinney's 1974), it is
nonetheless equally clear that New York's actions were not taken with an intent
specifically to replace food stamps. The increase there (to reflect the maximum
APL) raised the benefits as to new recipients, but as to those who had been
receiving assistance under the categorical programs in December, 1973, whose
benefits were required to be maintained at their old level under P.L. 93--66
('mandatories'), 21 the 'cash out' was accompanied by no change in cash benefits.
The New York three-judge court found:
13
'Indeed,
the only impact on plaintiffs of cashing out was negative: cashing out
rendered plaintiffs food stamp ineligible. From the point of view of New York State,
with respect to mandatories, the cash out provision allowed the state to credit each
$10 previously paid by the state under Public Law 93--66, 212 toward its hold
harmless level. This result is clearly intended by the express terms of the challenged
statute.'
14
Irizarry v. Weinberger, 381 F.Supp. at 1153; see also id. at 1155. Thus in both
New York and California, a pre-existing rise in benefits was carried over as a
reimbursable food stamp 'substitute'--precisely what plaintiffs here say
Massachusetts may not do.
15
16
Finally, we agree with the district court that the appropriate standard of review
is whether the Secretary's finding was 'arbitrary, capricious, an abuse of
discretion, or otherwise not in accordance with law', 5 U.S.C. 706; 388
F.Supp. at 389. Under this provision, even were we persuaded that the
plaintiffs' interpretation of the statute is a reasonable one, we would feel
constrained to affirm the Secretary's determination under the rule of deference
to agency construction in close cases. Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct.
792, 801, 13 L.Ed.2d 616 (1965), stated:
'When faced with a problem of statutory construction, this Court shows great
17
deference to the interpretation given the statute by the officers or agency charged
with its adminstration. 'To sustain the Commission's application of this statutory
term, we need not find that its construction is the only reasonable one, or even that it
is the result we would have reached had the question arisen in the first instance in
judicial proceedings.' Unemployment Comm'n v. Aragon, 329 U.S. 143, 153 (67
S.Ct. 245, 250, 91 L.Ed. 136). See also e.g. Gray v. Powell, 314 U.S. 402 (62 S.Ct.
326, 86 L.Ed. 301); Universal Battery Co. v. United States, 281 U.S. 580, 583 (50
S.Ct. 422, 74 L.Ed. 1051). 'Particularly is this respect due when the administrative
practice at stake 'involves a contemporaneous construction of a statute by the men
charged with the responsibility of setting its machinery in motion; of making the
parts work efficiently and smoothly while they are yet untried and new." Power
Reactor Co. v. Electricians, 367 U.S. 396, 408 (81 S.Ct. 1529, 1535, 6 L.Ed.2d
924).'
18
The continued viability of this language is shown by its citation, among other
cases, in Rosado v. Wyman, 397 U.S. 397, 415, 90 S.Ct. 1207, 25 L.Ed.2d 442
(1970), and more recently in Shea v. Vialpando, 416 U.S. 251, 262, note 11, 94
S.Ct. 1746, 40 L.Ed.2d 120 (1974).
19
20
Plaintiffs' equal protection claim is premised on the view that under the
Secretary's interpretation, 8 creates two classes of SSI recipients: (1) those
outside of Massachusetts, who receive either food stamp benefits or a specific
cash substitute;23 and (2) those in Massachusetts, who are allegedly denied
both. It will be clear from the previous discussion that we do not accept the
factual premise. The statutory scheme provides that SSI recipients receive
either food stamps, or benefits at the January, 1972, level plus a cash equivalent
to food stamps. In Massachusetts, as in the other 'cash-out' states, they in fact
receive the latter. (Indeed, in Massachusetts, as of July 1, 1974, they apparently
received more than the December, 1973, level plus the food stamp equivalent.)
It is not entirely irrelevant to add, since the point raises concepts of equality as
among SSI recipients in different states, that Massachusetts has traditionally
been liberal in its welfare benefits and that its present level of payments would
be considerably higher than the average SSI level even were the cash
equivalent to food stamps to be disregarded.
21
Affirmed.
The Supplemental Security Income program of 1972, Act of Oct. 30, 1972, P.L.
92--603, 86 Stat. 1329, and is codified at 42 U.S.C. 1381 et seq. (1974). By
301, this Act amended Title XVI of the Social Security Act in its entirety
(except as to Guam, Puerto Rico, and the Virgin Islands, see 303(b)),
effective January 1, 1974
States originally had the option to supplement at any level, 42 U.S.C. 1382e.
Under later legislation, however, they were required to provide those recipients
who had been on the rolls under the superseded programs for December, 1973,
at least the same cash benefit as before. P.L. 93--66, 212(a); see Irizarry,
supra at 1151
States have the option to administer their supplement themselves, but Congress
wished to encourage central administration of all state supplemental programs
because of the potential for greater efficiency. See 388 F.Supp. at 384
Under the food stamp program, which was intended to help provide adequate
nutrition for low income households, each eligible household receives a
monthly coupon allotment for which it pays a percentage of the coupons' face
value. The number of coupons each household receives depends upon the
number of persons in it, and the cost of coupons varies depending on the
household's income. The difference between the face value of the food stamps
and their cost to the particular household is called the 'bonus value' and
represents the benefit which each household receives through participation in
the program. Under P.L. 92--603, 401(b)(3), however, the Secretary of
Agriculture was instructed to determine an average amount to represent the
bonus value of food stamps for all recipients of categorical grant programs in
the particular state under benefit levels in effect for January, 1972. For
Massachusetts, the Secretary determined that amount to be $10 per person per
month
This was due primarily to the fact that few states were in a realistic position to
do so, because they could not qualify for the basic hold harmless provision in
the first place. Only eight states were subject to the basic provision,
H.Rep.No.93--627, 93d Cong., 1st Sess., 1973 U.S.Code Cong. & Admin.News
at 3184. The most obvious ineligibles would be those states whose APL's were
less than $140, see id. at 3183; Blong & Thorkelson, State Supplementation of
Benefits Under the Supplemental Security Income Program, 6 Clearinghouse
Review 653 (March 1973); it was impossible for them to reach the hold
harmless expenditure 'floor' (the 1972 state expenditure level, below which
there was no federal reimbursement) without exceeding the hold harmless
'ceiling' (the APL, above which there was no reimbursement), because the
entire current benefit level up to that ceiling was being paid by the federal
government. The mathematics also strongly affected those states with APL's
only slightly above the federal uniform level of $140. Under the categorical
programs, the states had funded 50% of assistance grants actually paid out, see,
e.g., Irizarry, supra at 1149; now that the federal share was so much larger, it
would require quite an increase in total payments for the state's current
expenditures to exceed its 1972 costs at the same benefit level. Thus, a state
with an APL of $150 (of which it paid $75), would now pay only $10 to reach
the $150 level. Its caseload would have to increase seven and a half times in
order for it to spend the same as it had in 1972 (except to the extent that other
factors increased its total payments); only in the states with more liberal APL's
would the 1972 level be reached with less than a doubling of the caseload. It
was theoretically possible under 401, but meaningless in practical terms, to
10
11
P.L. 93--233, 87 Stat. 947, passed both houses in final form on December 21,
1973, and was signed on December 30. Different portions of 8 of this law are
codified as an amendment to 3(e) of the Food Stamp Act, 7 U.S.C. 2012(e)
(1974) and as an amendment to Title XVI of the Social Security Act, 42 U.S.C.
1382e note (1974)
12
$223.50
$214.90
$242.50
13
Mass.G.L. c. 118A (1974). The benefit levels are set out in St.1973, c. 1210,
35
14
See Irizarry, supra at 1152 note 10; California Legislative Council, supra at 222
15
$221.00
$212.00
$242.50
16
17
It will be remembered that under 8(c), the state's action had to be taken prior
to October 1, 1973
18
at 3183--84
19
The congressional history is sparse, but this view is supported by the remarks
of the House Conference Chairman, Rep. Ullman, 119 Cong. Rec. H11956--57
(daily ed., Dec. 21, 1973)
20
None of the items listed in note 27 of that case indicate an intention specifically
to replace lost food stamp bonus value; and the California legislation, passed
too late under 8(c) in any event, clearly speaks in objective monetary terms:
'That the state exercises its option to increase the payment level under Section
401(b)(1) of Title IV of the Social Security Act Amendments of 1972 by an
amount equal to the sum of (A) and (B) of Section 401(b)(1) of that title.' 375
F.Supp. at 222, note 17
21
22
23
Plaintiffs explicitly disclaim any discrimination from the fact that fixing of the
bonus value at $10 is the result of averaging and not a precise equivalent. See
notes 7 & 9 supra