Obama just won an electoral victory bigger than any Republican has won since 1988. Last year he gave the GOP an all-spending-cuts-and-no-tax-increases deal on the deficit/debt. The president likely has a mandate to raise taxes on the rich, but he wasn't re-elected to raise taxes on anyone else or drastically cut spending. He was re-elected to make the economy work for more people than it is now.
Given that context, here's a deal I won't scream bloody murder over.
Let the Bush tax cuts expire. Then demand that Republicans pass tax cuts which include a payroll tax cut and re-instating the Bush rates for the middle and lower classes. Since Republicans are supposedly in favor of lowering taxes, as is every politician, they get to share in the credit of passing bipartisan tax cuts.
For their cooperation and for losing the upper end cuts, Obama can negotiate some long-term spending cuts. However, just as Republicans had a chance to repeal Obamacare/an expansion of social insurance in a subsequent election - the ACA was passed in '10 but the majority isn't coming on-line until '14 - Democrats should have a shot to repeal any cuts to social insurance. So no cuts to medicare or medicaid that start before 1/15.
It goes without saying that Social Security isn't on the table b/c it doesn't contribute to the deficit.
Any other spending cuts should also come after '15 and only be agreed to in return for a temporary extension of unemployment insurance for all of '13.
If, during negotiations, Obama absolutely must entertain spending cuts before '15 they should be backended as much as possible, not exceed 20% of the post-'15 cuts, and be divided into equal parts military (non-VA and non-pensions) and non-military.
That's more than a fair deal to a party that just decisively lost the executive, is now down 10 seats in the Senate, and had substantial losses in the House.
If you can't get a deal along these lines, Obama, then just demand that the current tax/spending framework stay in place and push the cliff/sequesters/bullpuckey/fake fiscal crisis until 1/15. No debt ceiling negotiations in the interim either.
And for God's sake, start coming up with and advocating ideas on returning the country to strong growth and helping with the jobs crisis, dilapidated infrastructure, and climate change; stop scaring everyone about the deficit, advocating Hooverism, and ginning up fake crises. This isn't an auspicious beginning to your second term.