By Elvina Nawaguna

WASHINGTON (Reuters) - The Congress that expired this week might have steered the nation away from the "fiscal cliff" of potentially devastating tax hikes and spending cuts, but it did not do much to save the U.S. Postal Service from its own fast-approaching cliff.

The cash-strapped mail carrier that lost almost $16 billion in the past year, ran into its legal borrowing limit and defaulted twice on required payments to the federal government, now turns to the newly sworn-in Congress for help.

The Postal Service loses $25 million every day, it says, as more Americans communicate by email and the massive payments for future retiree benefits take a toll.

It could run out of money in a little more than nine months, according to some estimates.

But Congress, bogged down by disagreements between lawmakers from rural and urban districts and distracted by fiscal policy fights, has not been able to agree on legislation to overhaul the struggling agency.

A bipartisan bill passed the Democratic-led Senate last year that would have ended Saturday mail delivery and eased its benefit payment obligations.

But the Republican-led House of Representatives, which had advocated for aggressive post office closures, never voted on a postal bill.

And several of the key negotiators left Congress or changed committees this week, leaving the future of postal legislation uncertain as the agency's financial condition deteriorates.

"It's important that they prioritize postal service legislation," said Art Sackler, head of the Coalition for a 21st Century Postal Service, which represents mailers. "We don't want to have it get lost again in the big shuffle."

As the 112th Congress expired this week, so did the proposed legislation that would have provided some legislative direction for the Postal Service as it seeks a more profitable business model.

In a prepared statement, Postmaster General Patrick Donahoe called Congress' inaction disappointing and said he would be looking to the new set of lawmakers to make postal reform legislation a priority.

Some of the players are changing. The Senate bill succeeded in large part because it was pushed by a bipartisan group of members, several of whom had experience and knowledge on postal issues.

Joe Lieberman, a Connecticut Independent who led the Senate Committee on Government Affairs, has retired. Massachusetts Republican Scott Brown lost his bid for re-election, and fellow Republican Susan Collins will no longer sit on the relevant committee.

That means all eyes are on Thomas Carper, a Delaware Democrat who now leads the government affairs committee and is expected to lead the Senate push for legislative reform in the new Congress.

DELAY THE POSTAL SERVICE'S DEMISE Continued...