Democrats are trying to muscle their financial reform package through the Senate before Memorial Day. Larry Summers, the Clinton-era Treasury secretary who now advises President Obama on economics, tried this week to give the bill a hasty shove.

He urged Senate Democrats Tuesday evening to take the bill as is to the Senate floor for a vote — without taking action on dozens of amendments that might trim the sails of the biggest banks.

But if the rush to move Senate Banking Committee chairman Chris Dodd’s bill along seems a tad premature, Summers’ rationale borders on the absurd.

“If you vote for cloture right now and don’t add any more amendments, we will have solved the issues that led to crisis,” Summers said, according to one account of the meeting. “Had this been law, as is, in 2007, we would not have had the crisis.”

(Update 4:14 pm: Summers’ office contends he never said this. “On financial reform he discussed the ways in which the bill, had it been law prior to the  financial crisis, would have changed the course of history,” says spokesman Matt Vogel.  “He made no mention of the cloture process, pending amendments, or the length of debate in the Senate.”)

The notion that the current reform bill would have prevented the crisis is ridiculous, as attested by the Senate’s vote Wednesday to keep debating the bill. Among those siding against Summers was Sen. Maria Cantwell, D-Wash., who says the Senate must tighten derivatives regulation before the bill moves forward.

The Dodd bill famously includes a proposal by Sen. Blanche Lincoln, D-Ark., that would force banks to spin off their derivatives desks. The idea is to keep bad bets in a dark market from crashing down on taxpayers’ heads.

But the Senate hasn’t yet voted on another measure, backed by Lincoln and Cantwell, that would put teeth in the enforcement of derivatives trading restrictions. Without strong enforcement measures, Cantwell contends, passing the Dodd bill would do nothing to prevent the next AIG — or keep taxpayers from having to foot the bill.

Cantwell would make it unlawful to trade standardized swaps other than through a clearinghouse, except in certain circumstances. This provision aims to reduce the risk that a trader’s failure will destabilize the financial system.

But the current language in the Dodd bill merely suggests that swaps be centrally cleared — without, skeptics say, providing meaningful sanctions against abuse.

“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,” Cantwell said Wednesday. “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.”

Update 3:30 pm: The Senate passed the cloture vote, with Cantwell still voting against, which suggests the teeth of the derivatives bill will remain on the floor.

Others suspect they know exactly what Dodd, long seen as a friend of the banks, and Summers are doing: kowtowing once more to the whims of the financial industry.

The derivatives business has padded the pockets of the biggest banks — JPMorgan Chase , Bank of America , Citigroup , Goldman Sachs  and Morgan Stanley  – for a decade. But as the crisis of 2008 shows, much of that profit ultimately came out of the pockets of taxpayers who now face huge bills cleaning up the mess.

Yet despite the widespread anger over the misdeeds of Wall Street in the recent crisis, the administration continues to act in the banks’ defense, said Michael Greenberger, a professor at the University of Maryland who a decade ago was Brooksley Born’s deputy at the Commodity Futures Trading Commission.

It was Born who pushed to have derivatives regulated at the turn of the century before she was overruled by the likes of Summers and another Clinton Treasury secretary, Robert Rubin.

Greenberger said that for whatever progress the Dodd bill might make in reining in Wall Street, all could be lost if the Senate fails to fill “the central hole in the bill” by putting in place meaningful sanctions on those who fail to trade derivatives safely.

He says the weak enforcement language smacks of the latest bid by banker-friendly politicos to ensure that the biggest banks get to hold onto their windfall profits.

“The way the bill reads now makes Wall Street happy,” said Greenberger. “This is just another open invitation for the banks to thumb their nose at the regulatory structure.”