The Senate Banking Committee has now scheduled its markup vote of bipartisan legistlation to reform the government-sponsored enterprises, a bill sponsored by chairman Tim Johnson, D-S.D., and Sen. Mike Crapo, R-Idaho, for April 29.

Conventional wisdom has it that the bill won't go anywhere in part because, now that the GSEs are "profitable," there's no need to do anything anytime soon. However, a close look at the GSEs shows that, despite a lot of progress in bringing them back from the brink, they are anything but profitable. Nor are they in any condition to withstand future stress without another taxpayer bailout. Thus, GSE reform is an urgent congressional priority.

Advocates of GSE "profitability" cite the billions the GSEs have sent back to Uncle Sam, billions that will shortly nominally equal the $188 billion taxpayers shoveled their way during the crisis. Some have argued this purported profitability shows how well the GSEs are doing, and, moreover, that they have done their time and now can be handed back to private shareholders, obviating the need for statutory reform.

The Federal Reserve Bank of Atlanta has put together a terrific new paper debunking this point. The paper illustrates that the billions the GSEs have earned of late are in large part based on an express guarantee from the federal government. Hand these franchises back to private shareholders and we restart the whole heads-I-win/tails-you-lose game that created the GSE crisis in 2008.

So, we can't give the GSEs back to shareholders. Could we, though, leave them mostly as is since they're making so much money? No, because they're actually not making much money, as a Federal Financial analysis that separates one-time gains from sustainable earnings makes clear.

Fannie's $84 billion in 2013 earnings are a lot, to be sure. However, to judge sustainable profit, one must subtract one-off results, especially if they are windfalls never to be repeated. At Fannie Mae, this includes $45.4 billion in a one-time accounting adjustment related to deferred-tax assets, leaving $38.6 billion in pre-tax income.

However, $3.9 billion of this pre-tax income is from one-time legal settlements with mortgage bankers and $3 billion comes from fair-value gains in derivatives. This leaves $31.7 billion, of which $11.8 billion is credit income resulting from lower loss reserves tied to higher house prices and assumption changes.

The real-time bottom line, thus, is $20 billion in fee and related income. On a book of $3 trillion in mortgage assets, that's not much.

In Freddie's $49 billion in net income for 2013, $23 billion came from releasing its DTAs and another $5.5 billion came from its legal settlements. Of the remaining $20 billion in net income, gains from derivatives totaled $2.6 billion and reduced provisioning for credit losses comprised another $2.5 billion of earnings.

Thus, the GSE's continuing net income for 2013 stands at $15 billion, against $1.9 trillion in mortgage assets — again not much.

The GSEs might well start to print money again over time as mortgage markets stabilize. But, does this make them any less risky?

No. The GSEs are the essence of highly leveraged, systemically important financial institutions, based on their size, interconnectedness and the lack of substitutability — that is, the lack of alternatives to market reliance on them. Leverage arises because they have no equity capital — every dollar that might go into capital goes to Treasury.

Thus, even a minor risk event could force another Treasury draw should it come at a time when one GSE lacks earnings on hand with which to absorb it. Since earnings at the best of times are scarce for Fannie and Freddie on a sustainable basis, capital is key … but there isn't any.

As a result, prolonged stress will lead to serious risk, while a sudden shock could spark another market meltdown. The combination of the GSEs' huge size and their agency status could create serious market liquidity or even solvency problems, depending on where the shock comes and what Treasury does at the time.

Will new law safeguard the financial system? Not at first, of course. But, reform will make the GSEs smaller and less risky when the next systemic crisis — and there surely will be one — comes. The sooner we start reforming the GSEs, the less systemic risk they will pose.

Karen Shaw Petrou is managing partner of Federal Financial Analytics Inc.