The White House and its allies believe we've already come a long way on deficit reduction—and that we don't have that much farther to go. By the Obama administration's estimation, we need $1.5 trillion in additional deficit reduction to stabilize the debt to GDP ratio to a reasonable level over the next 10 years. But the country's most vocal deficit hawks believe that's a misleading portrait of our country's fiscal future. The Peterson Foundation has released a new analysis showing that the debt-to-GDP ratio will reach 200 percent by 2040, even if the full sequester is allowed to take effect.

As the foundation points out, the fiscal cliff deal passed on Jan. 1 did very little to reduce the deficit. And the $1.2 trillion of sequester cuts target only discretionary spending, which isn't the main driver of the long-term deficit.

Now compare that 25-year projected deficit to the 10-year deficit projection, as shown here by the Center on Budget and Policy Priorities. The CBPP's assumptions about spending and revenue are comparable, but the shorter time frame presents a very different picture of fiscal health.

The Peterson camp believes limiting budget projections to 10 years presents a short-sighted and misleading portrait of our real long-term deficits, allowing legislators to shirk from their real responsibilities to rein in the budget. "Lawmakers and the American people should not be under any false impression that our debt challenges are behind us," the foundation's researchers explains.

However, critics believe it's the Petersonian analysis that's distorting the magnitude of our fiscal problems. The model that creates these scary long-term projections relies mostly on assumptions about health-care cost growth remaining fast (even though it's slowed in recent years) and is quite uncertain.

It's "mostly scaremongering—way too dismissive of progress made so far and over-emphasizing the very long term," says Jared Bernstein, a former White House economics adviser and CBPP senior fellow. Instead, Bernstein believes that we first need to stabilize the debt over the next 10 years, as the Obama administration is looking to do, rather than simply taking a hatchet to government services and sacrificing near-term growth.

Bernstein agrees, however, that the Peterson Foundation's new report makes it clear that long-term health-care costs are the real drivers of the deficit over the next 25 years.

The Peterson Foundation believes such data is a clarion call for reforming health-care entitlements and avoiding "alarming levels of debt." Bernstein, however, is among those who believe that we need to understand the real magnitude and nature of health-care cost growth before pushing through a massive overhaul that would unduly impact the economically vulnerable. The most ardent deficit owls go even farther, arguing that debt-to-GDP ratios are essentially artificial and irrelevant indicators that correlate with weak economic growth rather than cause it.