Oct. 18 (Bloomberg) -- California Governor Arnold Schwarzenegger endorsed a proposal to sell $3 billion of bonds to fund stem-cell research, two weeks before a vote that may make California the biggest U.S. sponsor of such studies.

The initiative is a response to President George W. Bush's decision to limit federal funding of research with embryonic stem cells, which are seen as a potential source of cures for disease. The governor's endorsement may benefit a campaign that only has a narrow lead among voters, according to a recent opinion poll.

``Research that we do now holds the promise of cures for tomorrow,'' Schwarzenegger said in an e-mail statement to reporters. ``California has always been a pioneer. We daringly led the way for the high-tech industry and now voters can help ensure we lead the way for the biotech industry.''

California, home to Amgen Inc., the world's biggest biotechnology company, would spend about $300 million a year over a decade on research into ways to cure disease with stem cells, should a majority approve it on Nov. 2. Backers say the measure will be a boon to the state by creating as many as 22,000 new jobs a year, while detractors say it will saddle the state with debt it can't afford.

Stem cells can develop into any cell type in the body, making them a promising source of treatment for degenerative diseases.

Gates Among Backers

The measure, called Proposition 71, would make California the biggest source of funding for embryonic stem cell research in the U.S., offering more than ten times what the federal government spends. The campaign has raised $27 million to sway voters from backers including Microsoft Corp. chairman Bill Gates, the world's richest man, and venture capitalist John Doerr, a general partner at Kleiner Perkins Caufield & Byers.

The measure has more support than opposition among voters. A poll by the Field Research Corp. found that the measure was leading among likely voters by 46 percent to 39 percent, with 15 percent undecided. The poll, with a margin of error of 4.3 percentage points, was conducted as the campaign began television advertisements that will continue through Election Day.

Schwarzenegger has the approval of nearly two-thirds of California voters, polls show. This year, the Republican governor used his popularity to convince Californians to pass a record bond sale that was initially unpopular.

``He is obviously a very popular and respected governor,'' said Fiona Hutton, a spokeswoman for the stem cell campaign. ``His endorsement bodes very well for our initiative.''

Against Bush

Schwarzenegger's endorsement places him at odds with Bush and other members of the Republican Party critical of the research. It has raised protests from religious groups because the frozen embryos are destroyed after the stem cells are taken. Schwarzenegger's positions on abortion and gay rights also differ from those held by religious groups in his party.

The stem cell measure is among the last that Schwarzenegger has weight in on. ``It took some time to deliberate,'' said Rob Stutzman, a spokesman for Schwarzenegger's campaigns. ``He talked to doctors on both sides of the issues as well as economists before he concluded what his decision would be.''

California state Senator Tom McClintock, a Republican who ran against Schwarzenegger for governor last year, argues in ballot materials sent to voters that the bond sale is ``corporate welfare'' that the state can't afford as it ``teeters on the brink of financial ruin.''

After three years of budget deficits, California has the lowest credit rating among U.S. states and pays the most to borrow. Because of the state's financial problems, the state wouldn't make any payments on the bonds for five years.

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Last Updated: October 18, 2004 20:57 EDT