In 2004, California voters passed Proposition 71, which provided $3 billion in taxpayer-funded research support for stem cell research. The money is to be spent at a rate of $300 million per year for 10 years.
According to San Diego Union-Tribune, $614 million has been distributed in the form of research grants thus far, but none of these grants have been for projects whose goal is to create stem cells through a process known as therapeutic cloning. The problem has not been ethical opposition, or a lack of research groups requesting funds for therapeutic cloning. Rather, the research has been stopped by a shortage of women willing to donate their eggs.
Therapeutic cloning is a technique used to produce embryonic stem cells that are genetically matched to a particular recipient. Genetically matching "donor" stem cells with their recipient is important to prevent rejection by the recipient's immune system, in the same way that organ transplants must be carefully matched.
The technique starts with an unfertilized egg donated from a woman. The genetic material of the donor egg cell is removed and replaced with the genetic material of the recipient. The egg then chemically activated, making it divide to an early embryonic stage. Stem cells can then be collected that are a perfect immunological match for the recipient. The technique has been accomplished in monkeys, but never in humans (a South Korean research team's claim to have done this in 2004 was subsequently proved fraudulent). Another description of therapeutic cloning can be found at the University of Utah's genetics site.
Unfortunately, donating eggs is a somewhat lengthy and risky process, which includes taking fertility drugs and being subjected to medical procedures. Individuals who donate eggs to fertility clinics for reproductive purposes (e.g. making a baby) are usually compensated at a rate of $3,000-5,000. However, in California, egg donors for stem cell research are banned from accepting compensation, aside from reimbursement for time away from work and transportation costs. The reason for the ban is so that money will not be a factor in a person's decision to donate. Not surprisingly, there are few donors.
However, researchers have argued strongly in favor of compensating donors, leveling the field for women who donate for research versus reproductive purposes. In fact, women in the UK undergoing infertility treatments have been "encouraged" to donate eggs in exchange for discounted medical services. This approach has apparently yielded some success.
A 2007 New York Times article further explores the pros and cons of paying women for eggs.