Maryland Gov. Parris N. Glendening yesterday announced plans to spend nearly $70 million in welfare aid on child care and other programs that help the poor stay on the job because the number of families in need of public assistance has dropped so dramatically.

In doing so, Glendening (D) joined other state leaders across the country who are attempting to fend off efforts by Congress to reclaim the federal funds. Glendening said any mandated givebacks would "break the promise" the federal government made when states agreed to reform their welfare programs three years ago.

"It has always been part of our plan to use this money to invest in our people," he said.

Glendening will expand subsidized day-care programs to an additional 6,125 children while creating a $22 million welfare "rainy day" account in case of a recession. The governor said he also hopes to spend $14 million more on public transportation and after-school programs geared toward keeping the newly employed off welfare.

Since 1995, Maryland's welfare rolls have decreased by 64.5 percent, representing about 147,000 people who have entered the work force.

The figures reflect a national trend in the wake of Congress's radical overhaul of the welfare system in August 1996. Since then, the number of welfare recipients across the country has dropped by 35 percent.

Experts attribute the shift both to the tactics of welfare reform, which set limits on how long people can receive benefits and prodded them to enter the work force, and to the booming economy of the last few years, which made new jobs available.

As a result, states are now finding themselves flush with cash as the number of people receiving public assistance has dropped. The reason: Under the welfare reform deal, Congress promised all states a set level of funding for five years--no matter how big or small their caseloads.

Some states have responded by increasing benefits for the people who remain on welfare; others are simply letting the leftover funds sit unspent.

But with House Republicans now eyeing the surplus money as a way to fund favorite domestic programs, Maryland and other states are looking for ways to spend it.

Many states are trying initiatives such as Maryland's, designed to help people who have moved off public assistance stay solvent.

"It's not about people on welfare anymore; it's about working people who can't make ends meet," said Bruce Katz, director of the Center on Urban and Metropolitan Policy at the Brookings Institution.

"There's increasing focus on how do you make work pay--how do you make sure [welfare reform] is not a short-term thing for people."

Susan Golonka, policy analyst for the National Governors' Association, which is leading the charge against the congressional move to reclaim welfare funds, said some states had been concerned that they couldn't help newly employed workers because the federal government might consider that just another extension of welfare.

But a clarification of welfare regulations issued this spring opened the door to such programs, as well as to services for poor families that have never been on welfare.

Glendening said his new initiatives would "make sure that the families who have moved from welfare to work remain employed and, just as importantly, have the opportunity to move ahead."

Maryland currently helps provide child care for 25,376 people on welfare or in low-paying jobs. The new initiative would spend $45.8 million to raise the income eligibility ceiling from $22,000 to $25,000 a year for a family of three, which would add about 6,125 children to the state's roster.

In the final two years of the federal welfare reform plan, Maryland hopes to use the remainder of its surplus on subsidized transportation for the newly employed, after-school programs for 5,000 poor children and three new "family support centers" to provide parenting classes and job training to young mothers.