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Paper 07: Real food

Signed 1 October 2026.

Plank: Health, food that doesn't work against the people eating it, priced honestly, and hospital billing that doesn't punish people for using the doctor's office instead of the hospital lobby.

1. What we want

We want food that isn't engineered to make people eat more than they meant to, made with ingredients that a regulator actually looked at before they entered the food supply, and priced without federal policy favoring the cheapest, most processed version. We want a family able to sell eggs, jam, and bread from their own kitchen, or a vegetable bed in a vacant lot, without a permitting process built for a cannery. We want a hospital bill that reflects what was actually done to a patient rather than which building it happened in, from nonprofit systems that give away as much care as the tax break they take is worth.

2. The evidence

The clearest evidence that processed food itself drives overeating, beyond ordinary willpower, comes from a 2019 NIH trial. Kevin Hall and colleagues put 20 weight-stable adults in the NIH Clinical Center for four weeks and fed them, in random order, two weeks of an ultra-processed diet and two weeks of an unprocessed diet, each matched for calories offered, energy density, sugar, fat, fiber, and sodium. People could eat as much or as little as they wanted. On the ultra-processed diet, they ate 508 calories a day more, on average, and gained about two pounds over two weeks; on the unprocessed diet they lost about the same [1]. Because it was a randomized controlled trial with food intake measured directly, rather than people recalling what they ate, it is the strongest single piece of evidence we have that the food itself is doing something to the signal that tells you to stop eating.

It is also a small, short, unusual study, and honest use of it means saying so. Twenty people is a small sample. Two weeks per diet is short next to a lifetime of eating. The subjects lived on a locked metabolic ward, which is nothing like a normal kitchen or grocery store. And other researchers have pointed out that matching two diets on overall nutrient targets still leaves room for real differences: the two diets differed in total sugar, saturated fat, protein, and fiber type, even while hitting the same broad targets, so the trial cannot fully separate "ultra-processed" as a category from those specific nutrients [2]. None of that undermines the headline finding, which has held up as the best inpatient evidence available. It does mean the honest claim is narrower than the one often made in public: a controlled trial found ultra-processed food made people eat about 500 more calories a day, which is real and important, but it is a single, short trial, not proof that processed food alone causes obesity in the population at large.

On subsidies, the evidence is weaker than the "cheap corn makes junk food cheap" story usually claims, and we should say so plainly. The most careful economic analysis of this question, by Julian Alston and coauthors, found that the wholesale price of a farm commodity like corn is such a small share of the retail price of a processed product that even large subsidies move retail food prices very little, and their effect on obesity is correspondingly small [3]. Eliminating corn subsidies would not make a candy bar meaningfully more expensive. That is a different question from where the subsidy money actually goes, which is a matter of public record: in 2024, the federal government paid $9.3 billion in commodity payments, $3.2 billion of it to corn and $1.9 billion to soybeans, on top of $10.4 billion in crop insurance premium subsidies that same year [4][5]. A less rigorous advocacy-group tally put a specific number on how much of that has gone toward ingredients used in processed food: since 1995, an estimated $19.2 billion of corn and soybean subsidies has funded corn sweeteners, starch, and soybean oil, the raw material for a large share of what ends up in a candy aisle [6]. Our case for fixing subsidies before taxing food rests on fairness rather than on price: it is hard to justify taxing a family for buying cheap processed food when the same government is paying, at the farm gate, to keep its raw ingredients cheap.

On additives, the loophole is real and larger than most people realize. Under current law, a company can decide on its own, using scientists it hired itself, that an ingredient is "generally recognized as safe," and put it in food without ever telling the FDA. Pew researchers who studied the safety reviews that companies do submit voluntarily found that 22 percent were conducted by an employee of the company that made the ingredient, and another 13 percent by a consultant the company chose itself; none were done by a panel picked independently [7]. Because that submission is voluntary, it only shows the ingredients companies chose to tell the FDA about. Pew separately estimated that roughly 1,000 additional ingredients have entered the food supply this way with no notice to the FDA at all [8]. A 2014 report by the Natural Resources Defense Council identified 275 specific chemicals from 56 companies that appear to be on the market through this undisclosed route, and a March 2026 report from the Environmental Working Group found 111 of those still on store shelves with no public safety review by anyone, government or otherwise [9][10].

On hospital pricing, Medicare itself pays two to four times more for the same service, coded the same way, when it happens inside a hospital outpatient department instead of a doctor's office [11]. MedPAC has tracked the consequence: the share of chemotherapy given in independent community oncology clinics fell from 65 percent in 2012 to 48 percent in 2021, as hospital systems bought up oncology practices and rebilled the same infusions at the higher hospital rate [12]. And on nonprofit hospitals' charity care, the Lown Institute's 2024 analysis of 2,425 nonprofit hospitals found that 80 percent spent less on financial assistance and community investment than their tax exemption was worth, for a combined shortfall of $25.7 billion in a single year, 2021: enough, Lown estimates, to erase 29 percent of the country's outstanding medical debt [13]. The American Hospital Association disputes this, arguing Lown's method ignores real costs hospitals absorb, including underpayment from Medicaid, research, and workforce training [14]. That is a fair objection to the exact dollar figure. It is not an answer to the underlying fact that a tax exemption is supposed to buy a specific amount of charity care and, at most nonprofit hospitals, it currently does not.

3. Why it happened

The subsidy structure traces to specific, dated choices. The federal crop insurance program, expanded repeatedly since the Federal Crop Insurance Act, now subsidizes an average of 62 percent of the premium on the policies that cover roughly 89 percent of the acreage of the eight major field crops, corn and soybeans chief among them [5]. Farm bill commodity programs get reauthorized on a roughly five-year cycle, and this year the money grew larger and got locked in longer: the reconciliation law Congress passed in July 2025 extended and increased the core commodity programs through crop year 2031, while the broader farm bill itself is currently running on an extension that expires September 30, 2026 [15]. That is a live legislative vehicle, right now, for the fix this paper asks for.

The GRAS loophole traces to a specific regulatory choice, too. The 1958 law that created the "generally recognized as safe" category was meant for ingredients as uncontroversial as vinegar and salt. In 1997, the FDA proposed replacing informal safety reviews with a formal notification program, but the rule that eventually took effect, finalized only in 2016, kept notification voluntary. A company can still decide for itself that an ingredient is safe and use it without ever telling the FDA, and nothing in the 2016 rule closed that door [8][9].

The hospital price gap traces to how Medicare set up its hospital outpatient payment system: it pays hospital outpatient departments on a different, generally higher fee schedule than it pays physician offices for the same procedure, on the reasoning that hospitals carry higher standby costs. That reasonable-sounding original justification turned into a byproduct nobody designed for: it made it profitable for hospital systems to buy independent physician practices and rebill the identical visit at the hospital rate, which is exactly the shift MedPAC has documented in oncology [11][12].

4. What to change

Federal. Fix commodity crop subsidies before adding any new tax on food. The farm bill extension expiring September 30, 2026 is the vehicle: cap or phase down commodity payments and premium subsidies on the small number of program crops that dominate the payments, corn and soybeans above all, before any conversation about taxing processed food at the register. Close the GRAS self-affirmation loophole: require every new food ingredient to be submitted to the FDA with its safety data before it can be sold, ending the option to use an ingredient with zero notice to the government. The FDA published a proposed rule to require this notification on August 10, 2026, with public comments due December 9, 2026, but the agency itself has said it may lack clear statutory authority to require notification, so Congress should pass the requirement into law rather than leave it dependent on a rule that could still be challenged or reversed before or after it is finalized [16]. Extend site-neutral payment to the full slate of services MedPAC has identified, clinic visits and imaging as well as drug administration. CMS used its own regulatory authority to apply site-neutral pricing to drug administration starting January 1, 2026, but the broader set of services MedPAC recommended was left out of the 2025 reconciliation bill and needs a separate act of Congress [17][18].

State. Legalize cottage food and direct farm sale statewide, following the states that moved this year: raise or eliminate sales caps, and allow online, phone, and mail sale the way Texas, Vermont, Michigan, and North Dakota did in 2025 [19]. Require nonprofit hospitals' charity care and community investment spending to match the value of their state and local tax exemption, with the exemption itself at stake for hospitals that fall short. Illinois and Utah already tie a spending requirement to the value of the property taxes a hospital would otherwise owe, and Oregon sets a community benefit spending floor by law; no state currently makes the exemption itself contingent on meeting that floor, which is the gap this ask closes [20].

Local. Make urban agriculture a permitted use by right in commercial and vacant lots, without a variance requirement. Chicago's ordinance already allows farming as-of-right, indoors, outdoors, and on rooftops, in any commercially zoned area, and Detroit created its own zoning category alongside a one-dollar-a-year lease program for city land, in a city now home to roughly 1,400 community gardens and farms [21][22]. Cities that want to encourage household and small-scale food production should copy the zoning language directly rather than write it from scratch.

5. What a bill would do

A federal bill would do three things, each severable. First, it would cap total commodity payments and crop insurance premium subsidies for the handful of crops that receive the largest share of support, and direct any savings toward deficit reduction rather than a new spending program, so the result is a real cut instead of funding shifted somewhere else. Second, it would amend the food additive provisions of the Federal Food, Drug, and Cosmetic Act to require FDA notification, with underlying safety data, before any new ingredient reaches the market, eliminating the option to self-affirm with no notice at all. The load-bearing clause is the one that removes the "no notice" option itself; a bill that only adds paperwork to the voluntary program would leave the loophole open. Third, it would direct the Secretary of Health and Human Services to extend Medicare's site-neutral payment policy to the full list of services MedPAC has recommended, clinic visits and imaging alongside drug administration, on the same payment-parity principle CMS already applied starting in 2026.

A model state bill would raise or remove the cottage-food sales cap, allow direct online and mail sale, and condition a nonprofit hospital's state and local property and sales tax exemption on spending at least the value of that exemption on charity care and documented community investment, audited annually, with the exemption suspended for hospitals that fall short two years running. The load-bearing clause is the suspension; a reporting requirement alone changes nothing, since most states already require reporting without requiring compliance.

A model local ordinance would classify urban agriculture, including rooftop and vacant-lot farming, as a permitted use by right in commercial and vacant-lot zones, following Chicago's category structure, and would authorize a low-cost long-term lease program for city-owned vacant land modeled on Detroit's.

6. What would prove us wrong

If a larger or longer replication of the Hall trial, run outside a metabolic ward, found that the gap between ultra-processed and whole-food diets shrank substantially or disappeared, that would weaken the strongest piece of evidence for the whole plank, and we would need to say so rather than keep citing the smaller study. If independent economic analysis after a real cut to commodity subsidies showed no measurable effect on where farmers plant or what gets grown, even indirectly, that would undercut the case that subsidy reform matters beyond fairness. If FDA data after closing the GRAS loophole showed the number of new ingredient notifications barely changed, that would mean the self-affirmation pathway was not actually where the volume was. If MedPAC's own tracking showed that extending site-neutral payment to clinic visits and imaging caused hospitals to close rural outpatient departments without patients gaining another place to go, that would be a real cost against the savings. The right response then would be to pair the policy with a rural backstop, rather than abandon it. And if a state that required exemption-linked charity care spending saw nonprofit hospitals convert to for-profit status rather than meet the bar, in numbers large enough to reduce charity care overall, that would be evidence the mechanism backfired and needs redesign.

Sources

  1. Hall, K.D., et al. "Ultra-Processed Diets Cause Excess Calorie Intake and Weight Gain: An Inpatient Randomized Controlled Trial of Ad Libitum Food Intake." Cell Metabolism, 2019. https://www.cell.com/cell-metabolism/fulltext/S1550-4131(19)30248-7

  2. Hengist, A., et al. "Ultra-Processed Food and Obesity: The Pitfalls of Extrapolation from Short Studies." Cell Metabolism, 2019. https://pubmed.ncbi.nlm.nih.gov/31230987/

  3. Alston, J.M., Sumner, D.A., and Vosti, S.A. "Farm subsidies and obesity in the United States: National evidence and international comparisons." Food Policy, 2008. https://www.sciencedirect.com/science/article/abs/pii/S0306919208000523

  4. USAFacts. "US Federal Agricultural Farm Subsidies: How Much Farmers Get By Year." 2025/2026. https://usafacts.org/articles/federal-farm-subsidies-what-data-says/

  5. farmdoc daily, University of Illinois. "Crop Insurance, Premium Subsidies, and Soybean-Corn Disparity." 2025. https://farmdocdaily.illinois.edu/2025/06/crop-insurance-premium-subsidies-and-soybean-corn-disparity.html

  6. U.S. PIRG. "Apples to Twinkies: Comparing Federal Subsidies of Fresh Produce and Junk Food." 2013. https://pirg.org/iowa/resources/apples-to-twinkies-comparing-federal-subsidies-of-fresh-produce-and-junk-food/

  7. Neltner, T.G., Alger, H.M., Leonard, J.E., and Maffini, M.V. "Conflicts of Interest in Approvals of Additives to Food Determined to Be Generally Recognized as Safe: Out of Balance." JAMA Internal Medicine, 2013. https://jamanetwork.com/journals/jamainternalmedicine/fullarticle/1725123

  8. NRDC. "Generally Recognized as Secret: Chemicals Added to Food in the United States." 2014. https://www.nrdc.org/resources/generally-recognized-secret-chemicals-added-food-united-states

  9. Environmental Working Group. "Secret GRAS: How 100+ Food Chemicals Bypassed Government Safety Review." 2026. https://www.ewg.org/research/secret-gras-how-100-food-chemicals-bypassed-government-safety-review

  10. The New Lede. "Report finds over 100 food chemicals companies declared safe without notifying FDA." 2026. https://www.thenewlede.org/2026/03/report-finds-over-100-food-chemicals-companies-declared-safe-without-notifying-fda/

  11. KFF. "Five Things to Know About Medicare Site-Neutral Payment Reforms." 2025. https://www.kff.org/medicare/five-things-to-know-about-medicare-site-neutral-payment-reforms/

  12. MedPAC. "Aligning fee-for-service payment rates across ambulatory settings." Report to the Congress: Medicare Payment Policy, June 2023. https://www.medpac.gov/wp-content/uploads/2023/06/Jun23_Ch8_MedPAC_Report_To_Congress_SEC.pdf

  13. Lown Institute. "Hospital Fair Share Spending, 2024." https://lownhospitalsindex.org/hospital-fair-share-spending-2024/

  14. Fierce Healthcare. "Nonprofit hospital systems have charity care deficits amid tax-exempt status." https://www.fiercehealthcare.com/finance/nonprofit-hospital-systems-charity-care-deficit-tax-exemption-lown-institute

  15. Congressional Research Service. "The Farm Bill After FY2025 Budget Reconciliation: Frequently Asked Questions." Congress.gov, R48775. https://www.congress.gov/crs-product/R48775

  16. Venable LLP. "New Details Emerge on FDA's GRAS Rulemaking: Updated Timeline, Narrower Scope, and Open Questions on Statutory Authority." 2026. https://www.venable.com/insights/publications/2026/07/new-details-emerge-on-fdas-gras-rulemaking

  17. KFF. "The Trump Administration Moves Forward with Medicare Site-Neutral Payment Reform." 2025/2026. https://www.kff.org/quick-insights/the-trump-administration-moves-forward-with-medicare-site-neutral-payment-reform/

  18. Committee for a Responsible Federal Budget. "New Site-Neutral Bill Introduced in Senate." https://www.crfb.org/blogs/new-site-neutral-bill-introduced-senate

  19. National Agricultural Law Center. "Cottage Food Laws: Recent Trends and Major State Changes." 2025. https://nationalaglawcenter.org/cottage-food-laws-recent-trends-and-major-state-changes/

  20. KFF Health News. "As Nonprofit Hospitals Reap Big Tax Breaks, States Scrutinize Their Required Charity Spending." https://kffhealthnews.org/news/article/nonprofit-hospitals-tax-breaks-community-benefit/

  21. Metropolis (Urban Sustainability Exchange). "Urban Agriculture Ordinance, City of Chicago." https://use.metropolis.org/case-studies/urban-agriculture-ordinance-city-of-chicago

  22. American Planning Association. "Urban Agriculture." https://www.planning.org/knowledgebase/urbanagriculture/