Parisi v. SHHS ( 1995 )


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  • 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.
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    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
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    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
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    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  &  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
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    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
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    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.
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    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.
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    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
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    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
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    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
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    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
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    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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