dissenting as to Part II-B.
I would remand that portion of the regulations which requires proof that the claimant will fall below a minimal subsistence level as to housing, food, and medical care for a “substantial” (defined as 30 days) or “lasting” (defined as 3 months) period of time in order to meet the test of “extraordinary hardship” necessary for waiver of overpayment in nonfault cases. Despite the acknowledgedly broad discretion conferred on the Secretary in setting waiver standards under an “equity and good conscience” delegation from Congress, an unexplained requirement that a claimant and/or his dependents must undergo deprivation of the minimal essentials of life, i.e., food, clothing, and medical care for at least 30 days or, in some cases, 3 months (in the case of a decision on appeal), § 617.55(a)(2)(ii)(A)(l), in order to be eligible for a waiver represents a classic case of an “arbitrary and capricious” regulation. Why — one must ask — is there any necessi*90ty for a sustained period of subminimal existence, when the claimant was in fact innocent of any complicity in the overpayment to begin with? Why, even if the Secretary has determined that the regulations shall reflect a no-nonsense attitude toward recovery (and, contrary to the majority’s inference, no one disputes the need for a strict pay back policy within reasonable bounds) is it not sufficient that she mandate repayment to the brink of subsistence levels and not beyond? Surely the Secretary could devise regulations that arrange for recovery in installments so as to permit the recipient to stay at least at the bare subsistence level until the debt is repaid. Requiring former employees (and their families) to go without necessary medical help, or without food even for a month — as the regulations appear to contemplate — reeks of a Dickensian callousness, not to be casually imputed to a Congress concerned with “equity and good conscience.”
Judge Greene suggested in the district court that ordinary welfare and medicaid services might kick in to prevent the abject misery that the regulations would otherwise visit on an inadvertent recipient of overpayments. But even that succor is not clearly derived from the regulations themselves, since in calculating minimal levels of food, shelter, and medical care they require the state to “take into account all potential income.” Section 617.-55(a)(2)(ii)(C)(2) (emphasis added). Literally read, the regulations could require repayment of the overpayments, as a first priority, even out of other sources of revenue designed to provide the minimal necessities. And of course we cannot be sure these emergency services will always be available within the first 30 days or 3 months of homelessness, starvation, or emergency illness.
These regulations give us no clue whatsoever as to the reasons for the draconian 30 days or 3 months sentence to subminimal existence imposed on innocent victims of bureaucratic incompetence. We cannot even begin to guess from the Secretary’s statement of basis or purpose or from her counsel’s answers at oral argument as to the purpose of the 30 day or 3 month requirement. The basics of administrative law tell us that the Secretary must provide an adequate explanation for her regulations to survive even the most deferential review. Motor Vehicle Manufacturers Assoc. v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29, 43, 103 S.Ct. 2856, 2866, 77 L.Ed.2d 443 (1983). Deference may cover a multitude of sins, but surely a court consulting the lowest common denominator definition of “equity and good conscience” has to call a halt somewhere and demand reasons. We have been given none.
This would not be the first time a court has rejected an administrator’s definition of “equity and good conscience” in overpayment regulations. Several courts have found that the Secretary, or her counterparts in other agencies, has in a single-minded devotion to conserving funds violated the common meaning of the phrase “equity and good conscience.” In Groseclose v. Bowen, 809 F.2d 502 (8th Cir.1987), the Eighth Circuit refused to uphold a tunnel-visioned definition of “equity and good conscience” in the Social Security Act, 42 U.S.C. § 404(b) (1988), because it took no account of the economic hardship of the recipient but insisted on proof of detrimental reliance. See 20 C.F.R. § 404.509 (1990). Id. at 505. Although the Groseclose court acknowledged that the phrase in question uses “language of unusual generality,” it reasoned that the judicial reviewer is still required to draw upon precepts of justice and morality and not simply confine herself to the rigid rules of the Secretary. Id. at 505 (quoting Gilies v. Department of Human Resources Development, 11 Cal.3d 313, 322, 113 Cal.Rptr. 374, 521 P.2d 110 (1974)); see also Marchese v. Secretary of Health and Human Services, 690 F.Supp. 162, 164 (W.D.N.Y.1988) (finding that the court is not bound by the Secretary’s interpretation of “equity and good conscience” under the Social Security Act regulations); Rosofsky v. Schweiker, 523 F.Supp. 1180, 1188 (E.D.N.Y.1981) (same).
Just recently, the Ninth Circuit rejected the Secretary of Health and Human Servic*91es’ definition of “equity and good conscience” for nonfault overpayments under the Social Security Act, on the grounds that it failed to consider the claimant’s economic hardship.
We conclude that the meaning of the phrase, “against equity and good conscience,” cannot be limited to the three narrow definitions set forth in the Secretary’s regulation [where the claimant changed his or her position for the worse, relinquished a valuable right, or lived in a separate household from the overpaid person at the time of the overpayment and did not receive the overpayment]. Congress intended a broad concept of fairness to apply to waiver requests, one that reflects the ordinary meaning of the statutory language and takes into account the facts and circumstances of each case.1
Quinlivan v. Sullivan, 916 F.2d 524, 527 (9th Cir.1990). In Quinlivan, the claimant received overpayments of disability payments for two years while in prison. When Quinlivan was released from prison he had no material goods, no means of transportation, and no income due to his inability to work because of psychological impairments. He spent his accumulated savings, including the overpayment, on clothes, a used truck, and daily living expenses. The Ninth Circuit found, under this set of facts, that requiring repayment of the over-payments would be against “equity and good conscience.” Id. at 527.
Similarly, in this case, innocent recipients of overpayments under the Trade Act Amendment would be required to spend all of their savings and demonstrate no prospect of income or any other form of assistance sufficient to maintain minimal levels of subsistence for at least 30 days before qualifying for a waiver of overpayments. I would find, like the Ninth Circuit, that result cannot be squared with “equity and good conscience.”
No other regulation construing the statutory “equity and good conscience” standard for waiver of overpayments requires 30 days to 3 months exile into abject poverty. The only precedent I can find is the unpublished guidelines for determining waiver of overpayments under the Federal Supplemental Compensation Act (“FSC”), 26 U.S.C. § 3304 note (1982). See 49 Fed.Reg. 4271, 4281 (1984) (Unemployment Insurance Program Letter, No. 7-84 (December 29, 1983)). This letter instructs states to grant waivers where repayment would be against “equity and good conscience” and defines that phrase in the same way the Secretary does here. But no officially-published regulation requires the kind of extreme financial hardship involved here,2 or even sustained subminimal existence for any period of time.
The majority relies on the difference between the Trade Act, which only “permits” waivers, and other statutes which “require” waivers where repayment would violate the tenets of “equity and good conscience” to bolster its conclusion that these regulations are in accord with Congress’ intent. On that theory, whenever Congress mandates waivers on an “equity and good conscience” basis, it intends a broader definition of that term than when it merely permits a state to offer waivers on the same grounds. That argument frankly eludes me. Congress never indicated any such differential intent, explicitly or implicitly. Among the regulations construing several other statutes that merely “permit” waiver of overpayments, none requires the type of sustained extraordinary hardship that the Secretary forces upon the innocent *92recipient of erroneously paid Trade Act funds.3
It is of course true, as my colleagues point out, that a state may do away with waiver altogether; so, the argument goes, why can it not reduce the standards of waiver to a 1-3 month subminimal level? I do not find this argument controlling either, because, while the state in many circumstances has an option whether to grant benefits — or waivers — at all, if it does so it must act not only constitutionally but rationally. Speiser v. Randall, 357 U.S. 513, 518, 78 S.Ct. 1332, 1338, 2 L.Ed.2d 1460 (1958). That is, the conditions it attaches to its grant of waiver must not only be related to the purpose of the statute but in accord with its terms. In this case that means that the conditions must reflect “equity and good conscience.” And the phrase “equity and good conscience” has never previously been construed by any court, or any agency in its regulation, to require an innocent recipient to plunge into subminimal existence for extended periods of time.
Furthermore, I cannot agree with the majority that the congressional formula of “equity and good conscience” meant principally to signal equity to the taxpayers, who furnished the funds erroneously paid to the recipients, rather than equity to the innocent recipients themselves. Nothing in the legislative history of the Trade Act suggests that Congress intended that single-minded focus. If it had, then why provide for waiver of nonfault overpayments at all? The fact is that Congress did specifically distinguish between two types of over-payments in the law — fault and nonfault— and provided for waivers only in the non-fault situation. In imputing to Congress an intent hellbent on recovering all over-payments to the taxpayers’ coffers, regardless of the recipient’s economic condition, the majority improperly conflates the two kinds of overpayments.
In sum and in candor, these regulations fail any test of “equity and good conscience” however defined;4 they fail the test of common decency, and they certainly do not “catch the conscience of the king.” W. Shakespeare, Hamlet, Act II, sc. 2. I would therefore remand them to the Secretary for modification or an explanation of why a requirement of sustained subminimal existence in the case of nonfraudulent recipients of overpayments accords with any rational concept of “equity and good conscience.”
. Similarly, the regulations for the Veterans’ Administration Act, 38 U.S.C. § 3102 (1989), permit waiver of overpayments of veterans’ benefits “when the facts and circumstances indicate a need for reasonableness and moderation in the exercise of the Government’s rights.” 38 C.F.R. § 1.965 (1989).
. The Federal Employee's Compensation Act, 5 U.S.C. § 8129(b), includes two criteria in its "equity and good conscience” determination: (1) "severe” financial hardship or (2) detrimental reliance. "Severe” financial hardship is defined as the inability to obtain “current ordinary and necessary living expenses." 20 C.F.R. § 10.322. This definition is not as restrictive as the Trade Act regulations which require "extraordinary" financial hardship, which is defined as the inability to obtain "minimal necessities of food, medicine, and shelter for a substantial period of time [at least 30 days].” 20 C.F.R. § 617.55(a)(2)(ii)(B).
. See, e.g., 10 U.S.C. § 2774(a), 4 C.F.R. §§ 91-93 (1990) (military pay); 5 U.S.C. § 8129, 20 C.F.R. §§ 10.321-323 (1989) (waiving recovery of overpayments to employees under the Federal Employees Compensation Act); 10 U.S.C. §§ 1442, 1454, 32 C.F.R. § 48.506(b) (1989) (servicemen’s family annuity and survivors’ benefits); 42 U.S.C. § 1383(b), 20 C.F.R. § 416.554 (1989) (supplemental security income).
. See, e.g., O. Goldsmith, The Vicar of Wakefield, ch. 13 (1766) ("Conscience is a coward, and those faults it has not strength enough to prevent it seldom has justice enough to accuse.")