By Daniel Wiessner

ALBANY, N.Y., Dec 13(Reuters) - Federal courts across the country are bracing for layoffs and delays in court operations if the White House and congressional leaders fail to avert the steep budget cuts set to kick in on Jan. 2.

Without a deal to avoid the so-called fiscal cliff, the court system stands to lose 8.2 percent, or $555 million, of its $6.9 billion budget, according to a recent analysis by the Office of Management and Budget at the White House.

Under a 2011 law, federal spending could be automatically reduced by $1.2 trillion over 10 years should a compromise not be reached.

Up to 2,000 of the court system's 32,000 non-judicial employees would lose their jobs if the fiscal cliff becomes a reality, the U.S. Administrative Office of the Courts estimated last week. It would be up to individual district and circuit courts to decide whether to absorb the cuts through layoffs, furloughs (mandatory unpaid leave) or a combination of the two, said Charles Hall, a spokesman for the AO.

In a Dec. 4 letter to the chief judges of the 94 federal districts, Judge David Bryan Sentelle, the chairman of the executive committee of the Judicial Conference, the courts' policy-making arm, said court officials initially had anticipated up to 5,000 layoffs. However, they were able to minimize workforce reductions by planning cuts to some national programs.

Among the programs that would be scaled back are assistance for pro se litigants and information technology projects aimed at making court operations more efficient, Hall said.

In addition to these across-the-board reductions, districts would face budget cuts of about 15 percent, Hall said. Exactly how those cuts would be implemented will be left to individual courts, he said.

REDUCTIONS 'INEVITABLE'

In a Nov. 8 letter to U.S. District Court Judge Thomas Hogan, the director of the AO, Senator Charles Grassley said the courts should consider cutting travel expenses, paid leave and some administrative expenses before laying off workers.

Grassley, the ranking Republican on the Judiciary Committee, cited a recent week-long conference in Maui, Hawaii, for members of the 9th Circuit Court of Appeals that cost more than $1 million.

"If spending on items of this nature were curtailed, the savings could go a long way towards filling the funding shortfalls your office identified," Grassley wrote.

Hogan responded in a Nov. 30 letter that his office would examine reducing travel, training, equipment and other administrative expenses to minimize layoffs but said the size of the cuts made "reductions in service inevitable."

A spokeswoman for Grassley did not return a request for further comment.

If President Barack Obama and lawmakers fail to avert the fiscal cliff, New York's four district courts, which already are congested, would be particularly hard hit, according to Seymour James, the president of the New York State Bar Association.

For example, the Eastern District in Brooklyn, which stands to lose up to $3.5 million of its $15 million budget, could lay off 30 of its 131 employees if budget cuts take place, said Douglas Palmer, the clerk of the court. The court could be forced to close for half of the day, he said.

The Southern District of New York would lose about $7.5 million of its $45.5 million budget for fiscal year 2013, according to district executive Edward Friedland. He said no layoffs are planned, since the court needs its current staff of 200 non-judicial employees to keep operations running. However, Friedland said the court is planning to furlough workers for 50 days next year if the budget cuts take effect.

Everything from docketing of court activities to building maintenance "would pretty much grind to a complete halt," he said.

Last month, James and leaders of 15 local bar associations sent a letter to New York's congressional delegation urging them "to do whatever you can" to avert the fiscal cliff.

In an interview on Thursday, James said that delays caused by the cuts could undermine confidence in the courts.

"The judiciary is supposed to be an independent branch of government, and they need resources in order to perform," he said. "To have the work curtailed is not good for democracy."

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