Cantor, Goode Hail Rate Cut, Urge Further Action

Two Virginia congressmen applauded a move by the Federal Reserve to slash a key interest rate Tuesday in an effort to shore up what it called "a weakening of the economic outlook."

The surprise reduction in the federal funds rate from 4.25 down to 3.5 percent marked the biggest funds rate cut on records going back to 1990.

"It is welcome news for investors, particularly homeowners. You can see this is good news for the economy," Rep. Eric Cantor, (R-7th) said following the Fed's announcement.

Federal Reserve Chairman Ben Bernanke and his colleagues took the action after an emergency video conference on Monday night, a day when global markets had been pounded by rising concerns that weakness in the world's largest economy was spreading worldwide.

"I do think global investors recognize the Fed is doing everything in its power to get the economy back on track," Cantor said.

Rep. Virgil Goode, (R-5th) said the rate cut will have short-term benefits, but for long-term economic stability the U.S. must reduce its dependence on foreign energy sources.

"I think that there will be a positive effect, but long-range our country has to rid our selves of our dependence on foreign fossil fuels," Goode said. "We need to fully explore alternatives in the 5th district of Virginia - switch grass, canola oil. We need to keep promoting those so we don't have such an outflow of dollars to the Middle East."

Cantor also added that Congress should not delay in enacting its own economic stimulus plan, including his proposal to cut corporate tax rates to spur job creation

"We need to work together to create an environment for investors to begin investment activity again," Cantor said. "That should be the target for any economic stimulus. The only real stimulus is a job."

The Associated Press contributed to this report.