It appears to be that the stem research is still permitted, but cannot be government funded. That in itself isn't a problem

In the past, when the government "failed to fund" a particular kind of research it wasn't much of a problem. The prohibition against human embryo stem cell research however effectively includes a ban on the use of any government funded facilities and/or resources by anyone engaging in such research.

The rules are typically vague, however those who wish to engage in this "legal but not funded" research have been forced to the interpretation that all facilities used and all persons working on this research must be strictly segregated from any and all other facilities and persons associated with any work that receives any government funding.

In effect, a researcher who participates in this research must sever all contact with any other research. Complete new and separate facilities must be constructed and equipped specifically for the "unfunded" research. It has even been the interpretation of legal advisors that the separate facility cannot even use the same accountants, purchasers, secretaries, janitors, or maintenance people. In at least a few places, complete and independent legal staff advisors have been deemed necessary.

The withdrawal of key researchers from other projects is by itself an immense expense to those other programs, since replacements must be found, recruited, trained, and brought into the program; and typically may require several years to come up to where an "expert" was when he/she departed. (And the new guy can't call the old expert who left to resolve a question.) This is true even for "unfunded" programs, if the work is being done in a facility at which some other program receives government funding.

Quite obviously, creating and staffing an entirely new facility dedicated to work that could easily have been done by a "fringe group" in an existing facility requires a large investment, largely unnecessary from from any technical and/or administrative considerations under former practices. It does have the "advantage" that the results of any such research will be owned by the "people with the money," instead of being subject to the usual "public benefit" rules for similar more conventionally - private or public - funded projects.

It is not a trivial "they just won't pay for it." It's whole new book of rules.

John