“ Judgment was entered enjoining the enforcement of § 615 'insofar as it violates the federal statute' and ordering that New Jersey 'revise the regulation to conform to the federal statute.' The state officials appeal.
The appellants and also the United States, in its amicus curiae brief, appropriaely point out that there is nothing in the federal statute that prohibits a State from making vendor payments so long as they are made from state funds without federal matching. The statute, § 406, merely does not provide for reimbursement to the State for payments of that kind. ”

“ We agree with these observations by the appellants and the amicus, and thus disagree with the District Court's conclusion with respect to direct payments insofar as those payments are made entirely with state funds not reimbursable under § 406 of the federal Act. ”