US President Joe Biden told Americans on Friday in a rare Oval Office address that the debt ceiling bill passed by Congress after weeks of wrangling saved the country from "economic collapse."

Speaking from behind the historic Resolute Desk on live primetime television, Biden said that the deal resolving the standoff between Democrats and Republicans was a compromise where "no one got everything they wanted."

"We averted an economic crisis and an economic collapse," he said, adding that "the stakes could not have been higher."

Biden said he will sign the bill, which authorises the government to extend the so-called debt ceiling and renew borrowing, into law on Saturday.

The US Treasury Department had warned that if the debt ceiling was blocked beyond Monday, the country could default on its US$31 trillion debt. A default would have likely triggered market panic, huge job losses and a recession, with global implications.

"Nothing would have been more catastrophic," Biden said.

Oval Office addresses have always been reserved by presidents for moments of unique national danger or importance.

Biden used the occasion to project a reassuring, calm tone. Sprinkling his speech with chuckles and smiles, he praised his opponents for negotiating in good faith and promised Americans that he had never felt more optimistic.

Biden said that Congress has now preserved "the full faith and credit of the United States."

But even with the House and Senate putting aside differences to finally rush through an agreement over the last week, the US economy's reputation took a hit.

Ratings agency Fitch said on Friday that it is keeping the United States' "AAA" credit rating on negative watch, despite the deal. (AFP)