It’s terrible to see science cuts in any field, but unfortunately these cuts reflect the priorities of average Americans. As has been pointed out elsewhere, the NIH budget increase reflects only 1% of what our government is putting towards the wars in Iraq and Afghanistan.
The question has never been physics vs. medicine, and merely by posing it in this way you do a disservice to both. The question is education/research vs. military spending. Our US budget is ~25%-40% military, depending on who you ask. This is a waste of money that could be spent on research and education.
There are other nations, such as Singapore and Japan, whose citizens prioritize science. Ours does not. When this changes, you will find that there is plenty of money for both physics and medicine.