U.S. President Joe Biden on Friday signed a bill to fast-track the process to raise the federal government's debt limit and avoid a potential default.

"The nation's full faith and credit has always been a shared responsibility. The bipartisan support of this legislation shows that it is still possible for leaders to work across the aisle and deliver," Biden said on the Twitter.

The bill, which was approved by both chambers of the Congress earlier this week, will set up a process for Democrats to raise the debt limit in a second bill by a simple majority vote.

Final votes on the second debt-limit bill are expected next week, and the new legislation could cover Washington's borrowing through the 2022 midterm elections, according to local media.

The U.S. Treasury Department currently has no room to borrow under its standard operating procedures after it has reached the debt limit of 28.9 trillion U.S. dollars.

U.S. Treasury Secretary Janet Yellen has urged Congress to raise the debt limit before Dec. 15. "I cannot overstate how critical it is that Congress address this issue. America must pay its bills on time and in full. If we do not, we will eviscerate our current recovery," Yellen told lawmakers last week.

Failure to pay the nation's bills on time could send immediate ripple effects throughout the global economy, particularly during a time of economic recovery and heightened uncertainty over a new COVID-19 variant, according to the Bipartisan Policy Center, a Washington, D.C.-based think tank.

The debt limit, commonly called the debt ceiling, is the total amount of money that the U.S. government is authorized to borrow to meet its existing legal obligations, including social security and medicare benefits, interest on the national debt, and other payments.