* U.S. Speaker's own party kills bill as fiscal cliff nears
* Ten-year yields ease further off eight-week highs
NEW YORK, Dec 21 (Reuters) - U.S. Treasuries rallied on Friday as investors bought safe-haven U.S. debt after a split in the Republican party reduced the chances of Washington averting before year-end a $600 billion fiscal crunch in 2013.
Yields on 10-year Treasuries extended Thursday's falls after House of Representatives Speaker John Boehner acknowledged his bill lacked the votes to pass.
"It's all about the 'Plan B' failure last night. That triggered a huge selloff in equities so Treasuries are rallying," said Thomas Simons, money market economist at Jefferies & Co. in New York.
The development sent the benchmark 10-year Treasury note up 14/32 in price; its yield eased to 1.75 percent from 1.80 percent on Wednesday.
The 30-year Treasury bond rose more than a point in price; its yield eased to 2.93 percent from 2.98 percent late Wednesday afternoon.
"Why are Treasuries higher? In a word: Boehner," said John Canavan, fixed income analyst at Stone & McCarthy Research Associates in Princeton, New Jersey. "His 'Plan B' idea to make an end run around negotiations with President Obama and just pass a Republican plan to avoid the fiscal cliff failed last night when the Speaker couldn't even round up enough of his own members to vote for it.
"Republicans packed up after the failure and said there would be no votes until after Christmas. Our toes are hanging over the fiscal cliff at this point," Canavan said.
"With no agreement currently in sight, and time needed to write and pass the bills even after an agreement is reached, there appears to be no chance we won't go fully over that cliff at least temporarily," Canavan added.
Earlier this week, the U.S. benchmark 10-year yield rose to an eight-week high of 1.847 percent on rising optimism that a budget deal was close.
Ten-year yields could pull further away from those highs, traders and strategists said. If a compromise were reached before year end, that could curb the rally in safe-haven debt, they added.
The lack of progress in the fiscal talks boosted demand at Thursday's $14 billion auction of five-year Treasury inflation protected securities (TIPS), which sold at a record negative yield of 1.496 percent.
The Federal Reserve cancelled the sale of shorter-dated Treasury debt that was tentatively scheduled for Dec. 27 as part of the central bank's "Operation Twist" stimulus program, the New York Fed said on its website on Thursday, as the sale was "no longer necessary."
On Thursday, the Fed bought $1.73 billion of Treasuries maturing February 2023 through February 2031, followed by a $7.42 billion sale of its short-dated debt holdings, as part of "Operation Twist".
The struggle over the fiscal cliff made economic data releases a bit of a subplot for the market.
News that U.S. consumer spending rose in November by the most in three years and that a measure of planned business spending jumped had little impact on asset prices which are looking ahead to the potential economic impact of tax hikes and spending cuts that will go into effect next year if negotiators in Washington D.C. cannot pull back from the so-called cliff.
For now, however, "The economy is holding in here at the end of the year despite the concerns about the fiscal cliff," said Gary Thayer, an economic strategist at Wells Fargo Advisors in St. Louis. One report - the Thomson Reuters/University of Michigan's consumer sentiment index -- showed that U.S. consumer sentiment slumped in December, suggesting Americans were concerned about the tax hikes and spending cuts that could go into effect in the new year if a fiscal cliff agreement is not reached.