You want the president to veto the federal budget until congress passes legislation that overturns the 1993 law. How do you think that would play out? The D's in the senate would never overturn the 93 law.
He can legally prevent stem cell research; but, he cannot realistically do so. The Dems would get enough Repub votes for an override once the folks back home started squealing. This is a no-winner for Bush.