Filed at 7:22 p.m. ET

WASHINGTON (Reuters) - The U.S. Congress was heading home for the holidays on Tuesday without making progress on pension relief for airlines and other companies struggling to fund traditional pension plans.

Senate leaders said they hoped to address the underfunding problems with ``defined benefit'' pensions when lawmakers return to work in January. Nationwide these pensions are underfunded by about $350 billion, the government estimates.

Disappointed business groups said failure to provide relief now would cost companies billions of dollars that could have gone into things such as new jobs or investment, but would have to be set aside to finance pension requirements that are expected to balloon further in the new year.

One of the proposals that the House of Representatives has passed but senators left on the table until at least January would provide companies with $25.5 billion in pension relief over two years.

``That's how much money will be coming out of the economy that probably won't have a chance to go back in next year,'' said Janice Gregory, senior vice president of the ERISA Industry Committee, which represents major employers with 25 million active and retired workers.

A sluggish economy, lower stock prices and low interest rates have combined to increase the liabilities of the traditional pension plans with a fixed payout at retirement, of which there are over 30,000 in the United States.

The mostly older industries with defined benefit pension plans want lawmakers to replace interest rate rules they say inflate pension obligations. They worry things will get even worse after December 31, when a temporary interest rate fix expires.

Some struggling sectors with severely underfunded pensions, like airlines, want extra relief as well.

No. 2 United Airlines, a unit of UAL Corp., and now under bankruptcy protection, estimates it will have to pay nearly $5 billion by the end of 2008 to resolve underfunding in several pension accounts.

But the Senate was unable to unite behind one approach on Tuesday and leaders agreed to postpone. Senate Republican Leader Bill Frist said the chamber would take up the House bill providing the $25.5 billion in temporary relief to companies ``at a time to be determined'' in the new year.

Senate Democratic Leader Tom Daschle said he hoped this would be ``shortly after we return'' in late January.

The House has also sent the Senate a bill with an additional break for airlines, and senators were crafting a third proposal that would expand the break to other sectors. Such breaks could be added as amendments to the relief bill.

In addition to being unable to decide on pension relief for companies, Congress has not addressed the issue of longer-term reform of pension rules to stop underfunding recurring.

The Bush administration opposes special breaks for companies with badly underfunded pensions, but supports temporary relief for traditional pension plans while moving to a longer-term solution.

Long-term, the administration favors a ``yield curve'' that would consider the age of a company's work force when figuring pension liabilities, but business groups oppose this.

Some administration officials as well as lawmakers question how urgent the crisis is for some companies, pointing out that the stock market has been making a comeback. ``The companies don't make their next pension contributions until next spring,'' said one administration official who asked not to be named.