Opinion of the Court

470 U. S.

ment among AFDC recipients. A State could establish a "community work experience program . . designed to improve the employability of participants through actual work experience and training," §409(a)(1), 42 U. S. C. § 609(a)(1), and it could condition AFDC eligibility on participation in the program. H. R. Conf. Rep. No. 97-208, at 980. A State could establish a "work supplementation program," under which it would "make jobs available, on a voluntary basis, as an alternative to aid otherwise provided under the State plan." §414(a), 42 U. S. C. §614(a). "Under this approach, recipients would be given a choice between taking a job or depending upon a lower AFDC grant H. R. Conf. Rep. No. 97-208, at 980. And the State could establish a "work-incentive demonstration program" as an alternative to current work-incentive programs. §445, 42 U. S. C. § 645; see H. R. Conf. Rep. No. 97-208, at 981. Participation in such a program would also be mandatory for persons eligible for AFDC. §445(b)(1)(B), 42 U. S. C. § 645(b)(1)(B). See also § 402(a)(19), 42 U. S. C. § 602(a)(19). In conjunction with the amendments to the earned-income disregards, these provisions suggest a change in strategy on Congress' part-away from financial incentives and toward programs designed to find employment for recipients and oblige them to take it.

Thus, it is clear that the OBRA Congress elected to pursue unchanged goals by new methods. By concluding that Congress could not have intended to include mandatory tax withholdings in the new $75 disregard because such a rule would dilute financial incentives to work, the Court of Appeals ignored the congressional choices manifest in the departure from approaches previously favored.

D

Were there any doubt remaining as to Congress' intention in 1981, subsequent congressional action would dispel it. In the immediately succeeding session, certain Members of the

House Committee on Ways and Means introduced H. R. 6369, 97th Cong., 2d Sess. (1982), by which they attempted to restore the financial work incentives eliminated by OBRA. The attempt failed. The Report accompanying the bill, however, describes the pre-OBRA state of the law. The Committee first noted that the "countable income" which determined eligibility equaled "gross income minus the disregards." H. R. Rep. No. 97-587, pt. 1, p. 6 (1982). Later, it referred to the potential disincentive posed, prior to the 1962 and 1967 amendments, by "any work-related expenses-such as transportation and child day care costs, and mandatory tax and other wage deductions." Id., at 12. It also listed the components of an AFDC family's pre-OBRA "disposable income (wages minus work expenses plus AFDC benefits)." Ibid. Finally, it recounted the pre-OBRA calculation of need: "States were required to reduce the State monthly payment by the amount of the family's earnings that remained after the following amounts had been excluded or disregarded: (1) the first $30 of earnings; (2) plus onethird of remaining earnings; (3) plus work expenses for the month (any expenses, including child day care, reasonably attributable to the earning of income)." Ibid. Each of these statements indicates that the OBRA Congress regarded mandatory tax withholdings as standard work expenses; none admits of the possibility that they might have constituted an independent deduction.

We take great care, of course, before relying on the understandings of Members of a subsequent Congress as to the actions of an earlier one, but we by no means eschew what guidance they offer. Consumer Product Safety Comm'n v. GTE Sylvania, Inc., 447 U. S. 102, 117-120, n. 13 (1980); Cannon v. University of Chicago, 441 U. S. 677, 686-687, n. 7 (1979). Here, we face the considered statements of a Committee whose Members were in the thick of the fight over earned-income disregards in the preceding session of the same Congress. And those statements clearly reveal the

common ground of that fight that the existing scheme did not independently disregard mandatory tax withholdings, but grouped them with other work expenses which the new flat-sum disregard would subsume.

The most recent confirmation of Congress' intentions in this matter came with enactment of the Deficit Reduction Act of 1984, Pub. L. 98-369, 98 Stat. 494, which, by its § 2625, 98 Stat. 1135, amends § 402(a)(8) to provide that "in implementing [the section], the term 'earned income' shall mean gross earned income, prior to any deductions for taxes or for any other purposes." The legislative history demonstrates that Congress enacted this provision in order to resolve the very dispute presented here. Specifically noting that the Courts of Appeals had come to conflicting conclusions on the matter and that this Court had granted the petition for certiorari in this case, the Conference Report leaves no doubt that Congress intended to endorse the competing construction. H. R. Conf. Rep. No. 98-861, pp. 1394–1395 (1984). The Senate echoed the House explanation:

"The statute would be amended to make clear that the term 'earned income' means the gross amount of earnings, prior to the taking of payroll or other deductions. The provisions in the AFDC statute which require that specified amounts of earned income be disregarded in determining eligibility and benefits have historically been interpreted as requiring that such amounts be deducted from gross, rather than net, earnings.

"The Committee agrees with the Department that there was no intention to change this interpretation when it approved the 1981 AFDC amendments. The Committee notes that when the Congressional Budget Office estimated the savings expected to be derived from the changes in 1981, it followed the interpretation shared by the Department and the Committee that the proposed disregards would apply to gross earnings." 1 Senate

Committee on Finance, Deficit Reduction Act of 1984, 98th Cong., 2d Sess., 982 (Senate Print 98-169, 1984). Thus, the 98th Congress reiterated its immediate predecessor's intentions not just by words but by deed-not only did it express in legislative history the "histori[c] interpret[ation]" of the relevant income, but it found it sufficient in resolving the disagreement to amend only § 402(a)(8). This 1984 legislation, which, it was said, sought to "[c]larif[y] current law," Senate Print, at 79, leaves no doubt as to the prospective interpretation of the statute," but it carries in addition considerable retrospective weight. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S. 141, 166-167, and n. 19 (1982); Red Lion Broadcasting Co. v. FCC, 395 U. S. 367, 380-381 (1969); FHA v. The Darlington, Inc., 358 U. S. 84, 90 (1958). In conjunction with contemporaneous evidence and the 1982 House Report, it removes all doubt.

IV

In sum, while it appears that from the early days of the AFDC program the States regularly have excluded mandatory tax withholdings when determining need, it is clear to us that from some time after the addition in 1962 of the work-expense disregard of § 402(a)(7), and certainly by the time of OBRA, they did so pursuant to the directive of that section to disregard expenses "reasonably attributable" to the earning of income. All the available evidence indicates that the Congress that enacted the OBRA changes in the AFDC program also viewed tax liabilities as work expenses subject to the § 402(a)(7) disregard. That congressional understanding compels the conclusion that mandatory tax withholdings were among the items encompassed by the flatsum disregard of § 402(a)(8).

"See Heckler v. Turner, 468 U. S. 1305, 1306-1307 (1984) (REHNQUIST, J., in chambers).

Respondents and their amici have offered various policy reasons why the disincentive to employment effected by the failure fully to account for work expenses is wrong. They point to the value, both pecuniary and inherent, of the search for and maintenance of employment, as well as to the longterm costs to the States in discouraging AFDC families' efforts toward economic independence. We, however, do not sit to pass on policy or the wisdom of the course Congress has set. Our task is only to determine that the Secretary has identified it correctly. We are satisfied that she did. The judgment of the Court of Appeals is reversed.

It is so ordered.