New York hospitals are bracing for steep cuts in federal funding for medical research and doctor training, as President Bush seeks to increase defense spending and to stimulate the economy with the budget he will release today.

The president’s $3 trillion budget for 2009 is expected to include billions of dollars in cuts to the Medicare and Medicaid programs, as well as reductions in subsidies for medical education.

Lawmakers and industry officials warned that such cuts and reductions would be felt acutely in New York, a hub of medical education. Statewide, there are 56 major teaching hospitals and 13 medical schools, which train an estimated 16,000 residents, or 17% of the nation’s physician residents, annually.

“When you’re deciding how to dispense the pain, I think it needs to be done equitably and not at the expense of New York City, which is what has been happening,” Rep. Vito Fossella, a Republican of Staten Island, said yesterday.

“We have to look across the entire system and make reductions equitably,” Mr. Fossella said, pledging to fight cuts or reductions in spending that could hurt New York institutions. Medicare and Medicaid should be “strengthened and protected,” he stressed, but “any reductions or reductions in the rate of growth should not fall disproportionately on New York City.”

Mr. Bush’s budget projects $400 billion in deficits for this year and next, according to the Associated Press and other news outlets. The budget proposes savings through reductions in health programs, including an estimated $200 billion in reductions in spending that had been planned for Medicare and Medicaid over five years. Funding to the Health and Human Services Department would be cut by $2 billion from what had been projected.

Such savings would make room for other proposals, such as a $145 billion economic stimulus plan proposed by Mr. Bush that would include tax rebates for most wage-earners. The 2009 budget is also expected to include $515.4 billion in defense spending, a high since World War II, the New York Times reported yesterday on its Web site. More than $600 billion in supplemental spending has been approved for military outlays.

Last year, Mr. Bush proposed cutting hundreds of millions of dollars in payments to teaching hospitals, a move that riled industry officials.
In addition to training young doctors, the hospital industry estimated that medical schools and teaching hospitals contributed $29 billion to New York’s economy in 2005.

This year, the federal budget is projected to freeze funding to the National Institutes of Health, which underwrites millions of dollars in research grants each year.

More than 216 institutions in New York receive funding from the NIH each year. Mayor Bloomberg has backed the development of East River Science Park, a $700 million bioscience center currently under construction in Manhattan. The center is expected to include 1.1 million square feet of research space when it is completed in 2009.

“The President’s health care budget once again will contain spending priorities that are almost perfectly backward,” a spokesman for the Healthcare Association of New York State, William Van Slyke, wrote in an e-mail message yesterday. “It’s a proposal that most certainly will solidify his administration’s legacy as an assailant of the health care system.”

Federal funding for graduate medical education was championed by Senator Moynihan, the Democrat of New York, who called teaching hospitals and medical schools a “public good” that could not survive in a market. He proposed a dedicated tax revenue stream for funding them. But conservative critics have questioned why taxpayers should pay to train physicians, many of whom go on to lucrative private practices. No such federal subsidy of such size exists to fund graduate training for high-earning professionals in other fields, like lawyers or accountants.

Last week, New York lawmakers criticized Mr. Bush for requesting $25 million for September 11-related health programs. Congress approved a total of $158 million last year for health programs related to the attacks of September 11, 2001.

“This administration’s slashing of key programs amounts to nothing less than absolute betrayal,” Rep. Jerrold Nadler, a Democrat of Manhattan and Brooklyn, said in a statement.

In an area of increased spending, however, the Bush administration may seek to increase the State Children’s Health Insurance Program. Last year, Congress approved a $35 billion increase in funding for SCHIP, but Mr. Bush vetoed the bills.

Governor Spitzer has pressed to increase the income eligibility for the program in New York, which uses federal and state funds to provide health care to children from poor families.