UPDATE 1-U.S. short-term borrowing costs rise to highest since 2008

(Updates with 2-year, 1-month bill auction results)

NEW YORK, Feb 20 (Reuters) - Some of the U.S. government's short-term borrowing costs rose to their highest in more than nine years on Tuesday as it raised $179 billion in the bond market to fund spending and make debt payments.

Tuesday's Treasury auctions made up more than half of the $258 billion in supply scheduled for sale this week.

Concerns about an expected surge in federal borrowing have escalated in the wake of last year's major tax overhaul which is estimated to add up $1.5 trillion to government indebtedness, and a two-year budget deal reached this month which would increase spending on military and entitlement programs by $300 billion.

The Treasury sold $51 billion of three-month bills at an interest rate of 1.63 percent and $45 billion of six-month bills at an interest rate of 1.82 percent. These were record-high amounts offered for auction for both maturities, and they sold at the highest yields since September 2008.

It also sold $55 billion in one-month bills at an interest rate of 1.380 percent, and $28 billion in two-year fixed-rate debt at a yield of 2.255 percent, the highest since August 2008.

The Treasury will sell $35 billion in five-year notes on Wednesday and $29 billion in seven-year notes on Thursday.

(Reporting by Richard Leong; Editing by Chizu Nomiyama and James Dalgleish)