i used to have a cocker spaniel, best darn watch dog i ever had, and i've had many. great with kids, i have 3, now teenagers. i say, keep the dog, and a behaviourist as jills suggests, and you should be okay.
oh, by the way, how is he when you take him out to the park or the streets with neibour kids? is he friendly or not? of course keep him on the leash, just in case. if he is agressive with kids, then maybe you need get rid of him.
or, maybe you need to get him trained, like they show on the animal planet, for dogs that end up in the shelter for adoption. first, they see if they are good around kids( do they try to bite if you pull their food bowl, as a mother, i know kids do that, mine did). then, they actualy train the dog so he will not bite.
i think if you do that, you, the baby and the dog will be okay.