WASHINGTON - New York state would lose at least $1 billion annually in federal funding if changes to the government's health programs for the poor proposed by President Bush are enacted, opponents said Monday.

"This is my 25th budget ... and I have never seen a worse budget for New York," said Sen. Charles Schumer, D-N.Y.

Republican Gov. George Pataki, who has called for controlling costs by changing how the state runs Medicaid, sounded cautiously optimistic about Bush's proposal.

"This is precisely why we advanced a plan to reform Medicaid and restructure the delivery of health care in New York to make it smarter, more affordable, more efficient and to improve quality," said Pataki budget spokesman Michael Marr. "The governor looks forward to working with our congressional delegation to ensure that New York receives the aid we need to make that transition possible."

The president proposes to boost defense and homeland security spending, while trimming many domestic programs the administration says are redundant or ineffective.

That includes proposed reductions in housing programs, rail subsidies and crime prevention efforts.

Under the new proposal, New York stands to lose the most in Medicaid, the federal-state program that provides health care to the poor.

The White House has proposed changing how the federal government distributes money to make it more effective, saying some states have mismanaged their share.

In New York, an estimated 3.7 million people are enrolled in Medicaid, plus an additional 550,000 residents under an expanded Medicaid program, according to state figures. That means more than 1 in 5 New Yorkers is enrolled in some type of Medicaid program.

The Bush plan was quickly attacked by the Healthcare Association of New York State, which represents some 550 hospitals, nursing homes, and health care centers. The group claimed the proposed budget would cost the state at least $1 billion a year, and perhaps many times that sum.

"To suddenly say we're going to reform Medicaid and to do it by reducing payments to states like New York is outrageous," said HANYS president Daniel Sisto.

Within New York, Pataki has proposed a package of benefit cuts that would save the state $1.1 billion, a plan that he says would also save county governments some $2.9 billion by 2009.

Sisto countered that Pataki's plan and the president's goal would put the squeeze on hospitals, jacking up the costs of health insurance for everyone.

"We cannot sustain the level of services we have if both the state and federal government are going to compress us in this vise," he said.

New York has the largest Medicaid program in the country, at an estimated $47 billion a year. Half that money comes from the federal government, while the state and the counties each contribute a quarter of the cost.

The rising costs of Medicaid in New York, fueled largely by rising enrollment, has led to great resentment among county officials around the state who have had to increase property taxes in recent years.

The Bush spending plan also calls for sharp cuts in some community development and housing programs, prompting fresh criticism from Democratic Rep. Anthony Weiner, who is running for New York City mayor.

"This budget targets a lot of the things that are very important to New York," said Weiner, who sought to link Bush's lean budget with Republican mayor Michael Bloomberg.

Weiner said the city's budget already assumes much more federal money for homeland security and the cost of jailing criminals who are illegal aliens.

The COPS program, aimed to help cities hire more police officers, would be slashed from $378 million to $117 million, representing a cut of about 70 percent.

The congressman said such programs have been caught in a financial tug-of-war between President Bush and Congress in previous years, but the 2006 budget takes a harder position.

"The starting line for this fight is much further back than it has been in a long time," said Weiner.