The Senate Thursday cleared the way for the Justice Department to sue the tobacco industry, overturning a bid by lawmakers to block the recovery of federal dollars spent to treat smoking-related illnesses.

The Senate removed from a bill language that would have barred the Justice Department from spending money to pursue a lawsuit against tobacco companies. President Clinton, in his State of the Union address, said his administration would launch a legal attack on the industry in the wake of actions filed by states that recovered billions of dollars. Republicans on a Senate Appropriations panel inserted a restriction in legislation to fund the Justice Department to prevent it from spending money to take on the industry in the next fiscal year that starts Oct 1. But Democrats resisted when the bill reached the floor, and Republicans fearing a public defeat backed down, offering language to nullify the committee's restriction. "It's a green light for justice against the tobacco industry,'' M. Cass Wheeler, chief executive of the American Heart Association, said in a statement.

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