Here's the state of play: President Bush limited federal research funding to human embryonic stem cell lines that had been derived before his speech to the nation on the topic in August, 2001. With considerable fanfare, President Obama lifted the Bush limits in April, 2009. In August, a federal district court judge issued an injunction against the Obama administration's stem cell policy declaring that it violated the the Dickey-Wicker Amendment which outlaws federal funding for the creation of human embryos for research purposes or for research in which human embryos are destroyed. In September, the DC federal circuit court temporarily stayed the injunction allowing federal funding for stem cell research to continue. The appeals court has not yet ruled finally on the issue.
Meanwhile, The Hill reports that legislation that would explicitly allow federal funding for stem cell lines derived from embryos discarded by fertility clinics is hung up in the lame duck session. If fails to pass this session, an appeals court ruling in favor the original injunction would mean that the Bush-era restrictions would be restored.
I will note that at long last the FDA is now allowing two privately funded clinical trials using human embryonic stem cells to go forward; one seeking to repair damaged spinal cords and another to restore sight.