Damn your duty, I have bills to pay. Point is, why risk my job when my boss wont have my back?

This statement makes me sad... I mean, I adhere to it, but I am not exactly a person who should be emulated.

It's their boss' (aka Congress) job to set a tone where it is not a livelihood risk to "do your duty".

If you're a peon, "doing your duty" is a great way to put a target on your back.

100% right. Before people start looking at those guys they should look at themselves. A lot of people in corporations do things they don't agree with or find ethically questionable but since the boss says so they will do it. "The fish stinks from the head". This is not isolated to government.

It's the same story everywhere. As long as there is hierarchy (which we do need in some form in most organizations) then there will be incentive for people to do things they personally disagree with due to the conflict of interest that arises.

It seems like one of the hardest problems to solve in our society because it seems to be so tied to our nature. I can recall doing things in grade school I knew was wrong but felt obligated to do because my peers and those I looked up to do too. While that isn't the same exact situation, the dynamics at play are the same. What can be done to combat this innate in-group/out-group behavior more effectively in our organizations and society?

Good or bad is not that clearly to distinguish. Going with the group is certainly the easiest path but on average it's probably also the right thing to do.