Contrary to what your doctor friends might have told you, the AMA has no power to restrict the number of residency slots. They are a private membership organization with no regulatory or accreditation authority. At one time they did lobby Congress to restrict graduate medical education funding but have since reversed that position.

https://savegme.org/

A minority of funding does come from sources other than CMS. Teaching hospitals are largely free to add more residency slots if they want to. The fact that most hospitals don't do this indicates that GME programs are largely unprofitable.