I somewhat agree with you. However, it is in keeping with the current political-speak. After all, future benefits are currently being referred to as "unfunded liabilities." As such, there is already calculated a per recipient benefit based upon wage-indexing. If we change the equation so that monthly distributions will be less -- even though it actually is a yearly increase as you stated -- we are indeed reducing the benefits versus what has been promised and calculated for.
Looking at this another way, the current calculus suggests that present contributors will receive about a 1.6% annual return on their investment. If we were to apply price-indexing, this would decline. Wouldn't this therefore be a reduction in benefits?
For instance, I have already received a projection of what my benefits will be when I retire. As I am in the group that would be impacted the most by the president's new proposal, a new statement reflecting this change would illustrate a lower monthly payment than the previous one. Isn't this a cut?