Instead of merging and duplicating the merged layer in several steps, that is already a quick key built into both Photoshop and CSP. Photoshop the action is Ctrl-shift-alt-E (It's called Stamp Visible) , CSP I don't know the quick key off hand, but you can set it up, it's in layer menu -> Merge visible to new layer .
So you can make an action that goes
-Stamp visible
-gaussian blur current layer
And then you can delete from there. If you want to make it so you can adjust it later you can add a mask and invert it so you can paint in with a soft brush where you want that blur to be (I do this all the time, it's great, highly recommend)
so then the action would go
-stamp visible
-gaussian blur current layer
-mask current layer
-invert mask
and then it won't look blurry except where you fill in the mask.