(Fortune Magazine) -- In July, George W. Bush quashed a bill to fund stem cell research, his first veto as President. The issue should loom large come November. Here's the impact on U.S. biotech.

1 What would the bill have done?

The legislation was effectively an override of Bush's decision on Aug. 9, 2001, not to fund the creation of new embryonic stem-cell lines with federal dollars. The process destroys embryos, an ethical dilemma that has rankled many pro-lifers, who argue that the government shouldn't pay for such research.

2 Is stem cell research in the U.S. at a standstill?

No. The federal government alone spent a hefty $609 million to fund stem cell research in 2005, although only $40 million went to study existing embryonic lines. Scientists hope embryonic stem cells will one day lead to cures for such diseases as Parkinson's and diabetes. They want the freedom to study some 400,000 excess fertility-clinic embryos that will eventually be discarded.

3 How does the veto hurt?

Proponents of the bill, like California Senator Dianne Feinstein, point to a recent exodus of top U.S. researchers to countries like Singapore, which are aggressively pursuing stem cell science.

4 Does this mean stem cell research in the U.S. will stall?

No. There's no law against state or private funding. A number of states have set aside funds for stem cell research, led by California's pledge of $3 billion in 2004. That's being challenged in court. But in July, Governor Schwarzenegger approved a $150 million state loan to get things moving.