The World's technology correspondent Clark Boyd delivers a primer on stem cell research, chronicling its history in the United States. Since 2001, the Federal government has funded embryonic stem cell research in the United States -- but with strict limits. There are few restrictions, however, on research conducted in the private sector.

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You cut your finger. Your blood clots, a scab forms, new skin grows, and eventually, good as new. It's a repair process so simple, so automatic, that we rarely give it a second thought. Our bodies carry out repairs, 24 hours a day, 7 days a week, with the help of a special set of cells. Swarthmore College biologist Scott Gilbert says these stem cells are able to generate other cells.

Gilbert: "We lose millions of blood cells per minute, but we gain them back because we have blood stem cells in our bone marrow. We lose about a gram and a half of skin a day, but we have skin cells which replace those lost cells."

Scientists have already harnessed some of the power of these stem cells from adults. Austin Smith is with the Institute for Stem Cell Research in Edinburgh, Scotland.

Smith: "We already have stem cell therapies that have been in the clinics for over 30 years. Bone marrow transplantation is a stem cell therapy, and so is skin-grafting. Of course, what we're hoping for now is a new generation of stem cell therapies."

Researchers say they'd like to engineer stem cells to create new body parts, or to fix broken ones. And to do that, they say the best way is NOT to use stem cells from adults, but ones taken from early embryos.

John Gearhart walks through his lab at the Institute for Cell Engineering at Johns Hopkins University in Baltimore. Freezers and centrifuges quietly hum next to rows of microscopes. Gearhart's been at the forefront of embryonic stem cell research for more than a decade.

Gearhart: "The power of this, for treating disease is going to be enormous...far beyond any of our dreams."

Gearhart says what makes stem cells from embryos so special is that they can, in theory at least, generate any type of cell in the body. He's now trying to learn how to take these primitive stem cells and turn them into brain cells to treat Parkinson's, and insulin producing cells to treat diabetes.

But if he were to inject those cells into a patient, the patient's immune system would probably reject them, like a mismatched organ transplant. John Gearhart says there's potentially a way around that problem. You could clone stem cells using the patient's own genetic material.

Gearhart: "You would take a cell from a patient. We would place it into a human egg in which its own DNA has been removed, and we go from one cell to maybe thirty, sixty, 100, or 200, and then from that we generate stem cells."

And those stem cells presumably could be injected into the patient safely. Gearhart says combining this type of cloning with stem cells is a vital part of the future of medicine.

But this field of research raises ethical questions. Is it OK to clone a human embryo to create stem cells? And is OK to destroy an embryo to harvest them? Many Americans say no.

In 2001, President Bush tried to strike a balance.

President Bush: "Embyro stem cell research offers both great promise, and great peril, so I have decided that we must proceed with care."

The President said the US government would fund the research, but with restrictions. Only stem cells taken from embryos BEFORE the new policy was announced could be studied with the help of federal dollars. The embryos that generated those stem cells, the President argued, had already been destroyed. He didn't want any additional embryos destroyed with taxpayer funds.

Some in the US Congress want to further restrict embryonic stem cell research, or even ban it all together. For the last few years, the battle has raged on Capitol Hill, and in political ads on TV urging voters to contact their lawmakers.

Many scientists are frustrated with the current state of affairs in the United States. Stem cell science is expensive, and government money is critical for many labs. The restriction on federal funding means most researchers have limited access to the newest stem cells that have been produced. Scientists say these stem cells are purer than the old ones, and might be more valuable for developing therapies.

Meanwhile, private companies and wealthy universities are moving forward, and with little government oversight. This has led to a situation where those who need federal funding are restricted in what they can do, while those with their own money have almost free reign. And that worries Swarthmore College biologist Scott Gilbert.

Gilbert: "This technology is so powerful that it really needs incredibly strong regulation. Let's legislate when it can be used, when it can't be used. I think we have to say, this technology can be used at this time for this disease, and for these people. And for other diseases, it should not be allowed."

The report issued today by the National Academy of Sciences is a step in that direction. The guidelines provide an ethical framework for scientists working with embryonic stem cells. But, those guidelines are not law. Researchers aren't required to follow them.

Some scientists would like to avoid the ethical issues all-together. They say it may be possible to create cells that act like embryonic stem cells, but don't require making or destroying embryos.

But most who work in this field say for the time being, there's no substitute for embryonic stem cells. And they've begun lobbying states to step in where the federal government hasn't.

Last fall, California's voters authorized three billion dollars for embryonic stem cell research in that state over the next decade. The legislatures of New Jersey and Massachusetts have passed similar measures.

But even with state and private money, some scientists fear that the tight limits on federal funding, and the possibility of a congressional ban, will cause the United States to lose its global bio-tech edge. George Daley is a stem cell researcher at Harvard Medical School.

Daley: "At meetings, we're constantly seeing our colleagues from Australia, from Singapore, Korea and China, and frankly, we're listening to the kind of work they're doing, and the support that their societies and governments are providing, and we're frankly envious. We're not promising cures in the next two or three years. But we're promising that this is an exploding, exciting area of science, which 20 years from now we'll say has had an enormous impact. If the United States cannot be at the cutting edge of that, it's a very, very sorry statement."

Daley says officials from Singapore approached him about building and running a stem cell lab there. He declined for personal reasons.

But working with outdated stem cells, Daley says, is like using an outdated operating system on a computer. And he wouldn't be surprised if other researchers in the US might look abroad for an upgrade.