UPDATE 2-U.S. Treasury plans bigger debt auctions, warns on debt limit

(Adds background on debt ceiling)

WASHINGTON, Jan 31 (Reuters) - The U.S. Treasury on Wednesday said it plans to hold larger debt auctions due to the winding down of the Federal Reserve's bond buying program, but it warned that it would only be able to pay all of the federal government's bills through February.

"Based upon available information, Treasury expects to be able to fund the government through the end of February," Clay Berry, Treasury's deputy assistant secretary for capital markets, said in a statement. "Treasury urges Congress to act promptly on this important matter."

A Treasury official said in November that the U.S. government might only have enough money under the current debt limit to pay its bills through January.

While brushing up against the debt ceiling has become a fixture of U.S. political life in recent years, missing payments could trigger calamity in financial markets and a recession.

Treasury Secretary Steven Mnuchin wrote lawmakers on Wednesday to inform them that the department would continue to suspend payments into federal employee retiree, health and disability funds through Feb. 28 in order to stay within the legal limit on borrowing.

The fiscal outlook also played a role in Treasury's decision to sell more nominal coupon debt as well as two-year floating rate notes at weekly auctions, Berry said.

Treasury anticipates increasing the size of two-year and three-year note auctions by $2 billion each per month over the next three months, beginning in February, Berry said.

It will also increase auction sizes for five-year, seven-year and 10-year notes as well as for the 30-year bond, beginning in February, Berry said. (Reporting by Jason Lange; Editing by Paul Simao)