New Jersey can breathe freely again. It can still ship its garbage to Indiana.

A proposal that would have allowed states to close their borders to other states' garbage was killed in House-Senate negotiations Friday.The garbage fight has pitted New Jersey lawmakers against those from Indiana, but the issue had far broader ramifications. By some estimates, as many as two-thirds of the states ship garbage beyond their borders because of landfill shortages.

Last month the Senate tacked the interstate garbage shipment prohibition onto an appropriations bill for the District of Columbia. But House-Senate conferees removed the provision Friday. The House never enacted a similar measure.

"This is a big win for New Jersey," said Sen. Frank Lautenberg, D-N.J., who had led the fight against the measure sponsored by Sen. Dan Coats, R-Ind.

Coats characterized the issue as one giving "every state the right to determine its own destiny" in managing and disposing trash.

"We lost the battle but believe ultimately we will win the war," Coats said through a spokesman. Coats, who has made the garbage issue a key part of his re-election bid, promised to renew the fight in the next Congress if re-elected.

Indiana is among the recipients of a rising tide of out-of-state garbage. Coats' measure would have allowed states to block garbage imports or impose high fees on such shipments.