Ethics Newsline®

Can something legal be wrong? Yes, but that distinction isn’t always obvious. Take the case of some Texas teachers who retired last week. They raced against a legal deadline to get themselves paid two pensions instead of one. If they — and Congress — had only zoomed the ethics lens out a bit farther and seen a bigger picture, maybe they wouldn’t have assumed so readily that whatever isn’t illegal must be ethical. Here’s the story:

Texas, unlike most states, runs its own pension fund, the Teacher Retirement System of Texas. Because educators pay into it during their working years, they’re excused from the federal Social Security system. That’s fair: Since they pay nothing to the feds, they get no Social Security checks when they retire.

With one exception. Until Congress closed a loophole last week, teachers whose final day of work was with a government entity that paid into both retirement systems qualified for Social Security if their spouse also paid into Social Security.

So for years, retiring Texas teachers have worked at their regular jobs right up to their next-to-the-last day. Then, for that final day, they hired on with one of about a dozen Texas school districts that paid into both funds and agreed to help teachers navigate the loophole. Most of these educators spent the day as furniture movers, file clerks, or janitors. But that was enough to make their records show they were paying Social Security at the time of retirement. So the federal government had no choice but to pay them a second pension on top of their Texas pension.

Those special districts loved it. According to the Dallas Morning News, districts charged teachers up to $700 for the privilege of working that single day. The hard-pressed districts used those fees to buy computers, school buses, and other necessities.

Nor did the teachers object to paying. The newspaper reports that more than 16,000 teachers have plunked down the fee. In return, some of them reaped as much as $1,700 extra each month for the rest of their retirement. This year, with the loophole closing July 1, an unusually large group of teachers chose to retire and claim their double benefit.

What’s wrong with this picture? After all, nobody did anything illegal. Didn’t the fee-reaping districts need that money for their schools? And didn’t traditionally underpaid teachers deserve a boost to their retirement income?

Congress didn’t think so, seeing the problem as one of inequitable treatment. Why, legislators asked, should some government employees get to double dip while others don’t?

An equally potent argument centers on the unfairness of reaping an unearned benefit. True, Social Security isn’t meant to repay only what you contribute. It’s an insurance plan, not a savings account. While some workers put in more than they get back, the reverse is also true. As with any insurance policy, however, the deal between Social Security and working Americans is a simple one: If you pay nothing in, you’re not covered. If, like the Texas teachers, you violate that deal, who pays? All of the other insured workers across the country. Is that fair?

Then there’s the question of teachers as exemplars. What’s the lesson they send their students when they willingly engage in antics as weird as they are extreme? When they travel for one day to hire on with a district where they’ve never worked, forking over substantial sums to do menial tasks, how are they helping their students understand the difference between the appearance of and the substance of true work? How do they have any standing to critique the ethics of some parts of corporate America? When accountants invent curious shelters that cause investors or taxpayers to pay more so that a few insiders can benefit, how can these teachers help their students understand the difference between the legal and the ethical?

But it’s easy to blame the teachers. It’s easy to forget the age-old truth that few things tempt good people more than easy money. Congress is to be commended for closing down that temptation. But it’s to be blamed for placing such a massive ethical burden on otherwise good people in the first place. We sometimes imagine that legislative power resides in being able to say, That’s illegal. More dangerous is the power to say, That’s legal — to take a situation that ought not to be and say, That’s okay. When teachers are tempted to draw out what they haven’t earned, shift the financial burden onto other taxpayers, and then imagine they’ve done nothing wrong, something really is wrong — not only with them, but with the system around them.

©2004 Institute for Global Ethics