D.C. Schools Superintendent Vincent E. Reed and Washington Teachers Union President William Simons yesterday endorsed a plan that would eliminate two weeks of pay for all school employes as a way to save the jobs of some 400 teachers.

Reed said the school system -- which has to cut $39 million from its budget for the upcoming school year -- could save $10 million of that amount if the employes received no pay for five days during the Christmas holidays and five more days at the end of June when school is out.

The loss of pay would affect all school employes from the superintendent on down. For teachers, the largest class of those to be affected, the two-week pay loss would amount to an average of about $595 a week.

"I would look upon such a plan with favor," Simons said yesterday after a joint press conference with Reed and the president of the Greater Washington Central Labor Council and the Council of School Officers. Already, 600 teachers have received layoff notices.

But Simons said he would ultimately have to put such a proposal to a vote among the union membership. It would also have to be approved by the D.C. school board.

Several teachers who attended the press conference expressed support for such a measure. Earlier this month, however, union members were divided when the possibility of giving up their annual pay increase to save jobs was discussed.

Reed said that if the plan were adopted, the school system may have to lay off only 500 teachers instead of about 900. There are currently 6,600 teachers in the system.

He said he had originally opposed the idea of eliminating paychecks, calling it "a bandaid approach" to the schools' fiscal crisis. But the system has been forced to continually increase the number of proposed teacher layoffs until they are nearing a critical level, Reed said.

The superintendent added that still more teachers' jobs could be saved if the City Council approves legislation which would enable school employes to retire earlier without having their retirement benefits reduced.

Reed said school officials were also discussing opening school a few weeks later than normal next September to save money. But for the time being, the plan is to open school at the usual date, just after Labor Day.

Simons complained that many schools have already lost half the teachers they had last year. Thirteen of the 26 teachers at Lafayette School in Northwest, for example, have received layoff notices; five out of six teachers at Key Elementary in Northwest have been laid off, Simons said.

These teaching positons are to be filled by teachers from other schools or by 5 assistant principals, who are being sent back into the classroom, Reed said.

However, Simons and school administrators complained yesterday that it has been virtually impossible for principals to plan for the upcoming school year without knowing how many teachers they will have.

Simons also predicted that classes of more than 40 pupils "will become the norm" on the junior and senior high school levels and he disputed claims by Reed and the school board that the pupil-teacher ratio in the elementary schools will be about 28 to 1 as a result of the budget cuts.

"That 28-to-1 ratio sounds good on paper. But there is not one teacher for every 28 students," on the elementary level, Simons said. He predicted that in the heavily populated elementary schools in Southeast, for example, there would be more than 30 students in a class.

Simons said he called the press conference to announce that the union intends to begin a massive letter-writing and lobbying effort to get Congress -- which has the ultimate say over the city's budget -- to restore some of the funds that have been cut. The campaign will also include a candlelight vigil July 24 on the steps of the Capitol to "symbolize the paying of last respects to the public schools."

Noting that adult education, pre-kindergarten, industrial arts, individaulized instruction and business classes will have to be reduced because of the budget crisis, Simons said "the D.C. public schools may well have to post a sign on each building which reads, 'Out of business.'"

Reed said he will try to keep the number of special reading and math teachers the same as it was last year, since these are the two critical learning areas.

It was unclear last night how much support there was for the plan on the school board.

Board members Frank Smith (Ward 1) and Eugene Kinlow (At-Large) said they supported the idea. However, John E. Warren (Ward 6), who is chairman of the board's budget oversight committee, said he would need more details before making a judgment on the plan.

Board President R. Calvin Lockridge orignially proposed such furloughs for school employes last May. But Lockridge wanted to order furloughs only for the system's 945-member administrative staff through the summer. Lockridge could not be reached for comment yesterday. CAPTION: Picture 1, WILLIAM SIMONS . . . to seek union vote; Picture 2, VINCENT E. REED . . . sees $10 million saving