There is an OpEd on Stem Cell Research Support in today's Boston Globe by Christopher Thomas Scott and Jennifer McCormick.
From the OpEd:
The consequences of the Bush policy [on stem cell research] are profound and unambiguous. NIH officials admit the agency has ceded leadership in the field. Scientists no longer undertake hegiras to Washington to learn about important advances in stem- cell biology. Instead, countries where the research is encouraged have stepped into the breach, making new lines at an astonishing rate.
...
In 2002, roughly one-third of the papers were from US research groups. By 2004, US groups accounted for only one-quarter of the publications. Government policy may be among the factors contributing to the gap between US and international publications in the field.
I might be missing something from across the pond, but wasn't discouraging stem cell research the whole point of preventing government funding?
Just an update on how things are getting worse.
As you point out - this is proof that a lack of NIH funding does affect the direction of research. (i.e. we can't rely on state funding)