After a few more amendments to the Wall Street reform bill this evening (and a defeat for the Whitehouse amendment to allow states to cap interest rates on credit cards), Harry Reid set up a vote for cloture for today. He expects Arlen Specter to be on hand, and to vote for cloture, so that brings him within one vote of getting to 60. But Russ Feingold and Maria Cantwell, the two Democrats who voted against invoking cloture, are digging in. They want changes to the bill that would strengthen it, particularly around derivatives.

Cantwell’s office released a statement late Wednesday explaining her complaint:

The issue, Cantwell said, is ensuring transparency and oversight of the currently unregulated derivatives market. Even seemingly small loopholes can create structural flaws in the financial system that can cause tremendous damage in the long term as they are exploited by Wall Street. She likened the issue to building a dam.

“Even something like the Hoover Dam, with all the great concrete and all the great engineering … still has a problem if somebody drills a hole in the bottom of it,” Cantwell said in a Senate floor speech just after the vote. “This issue is a fundamental one. We won’t have reform if we don’t have exchange trading and clearing, if we don’t bring derivatives onto the same kind of mechanisms we have for other products in the financial markets. And if we don’t have that, then I don’t know what we’re doing out here in the context of what brought us into this crisis.”

Cantwell is seeking derivatives reforms including: minimum requirements for capital behind trades; transparency in pricing; real-time monitoring of trading activity; transparent valuation of derivatives; limits on speculation; and public transparency. The pending reform bill contains many strong provisions that Cantwell not only supports but co-authored. But she said the derivatives language in the current version of the bill retains loopholes that could once again cause serious financial disruption.

As I noted earlier, this is basically the loophole that Americans for Financial Reform has suggested would make the mandate of trading derivatives on clearinghouses meaningless, because there would be no penalty or force behind it, and it would not disallow uncleared swaps. Some have called this a made-up problem, saying that the penalties do exist for violating the derivatives statute on clearinghouses. But Cantwell obviously doesn’t think so.

Cantwell’s two-page amendment, co-sponsored with Blanche Lincoln, would clarify the language. It says that “any swap that is required to be cleared is unlawful unless the swap is cleared.” The current language is looser. The other part of the amendment allows regulators to stop derivatives deals if banks violated trading requirements. Basically it amounts to loophole-tightening, and the argument that it’s not important because the language is already tight makes little sense. Because if the end goal is to have language that works, what’s the problem with clarifying it?

Cantwell has a separate amendment with John McCain that would restore the Glass-Stegall firewall between investment and commercial banks, but while she said today she would prefer a vote on that amendment, “her primary concern was the derivatives issue.” The Glass-Steagall amendment seems to be the major complaint for Feingold; in his statement today, he touted his vote in 1999 against the repeal of Glass-Steagall.

It doesn’t look like Cantwell will have a shot at offering either amendment.

Aides to Mr. Reid tartly dismissed Ms. Cantwell’s concerns, saying her derivatives proposal could be added when the Senate and House regulatory bills are combined and that the proposal to restore the Glass-Steagall Act would have been defeated easily had it been called up for a vote.

It seems the game plan for Senate Democrats is just to hope Cantwell, Feingold or some Republican breaks ranks and switches on the vote. Dick Durbin said on the floor Wednesday night that he hopes Cantwell or Feingold would “come around” today. I don’t know if that will happen. But Scott Brown (R-MA) is suggesting tonight that he did tell Harry Reid he’d be for the bill, and he may switch his vote as soon as today:

“I’m confident that something will be resolved,” Brown told reporters tonight. He claims his last minute defection was based on remaining objections he has to rules restricting high risks trades by financial companies, which he says will adversely impact insurance companies and trusts in his state.

“When he told me that I let him down, I told him straight up that I certainly felt badly about it, but bottom line is representations were made, issues were not resolved and here we are,” Brown said.

I’m not quite sure what he’s even talking about, but he may be an easier mark to get to 60, ultimately, than Cantwell or Feingold. Meaning that we could have an endgame on the bill without progressives getting their way on further strengthening amendments.