Numerous fed. programs, policies, & activities are supported through the tax code. As described in statute, tax expenditures are reductions in tax liabilities that result from preferential provisions, such as tax exclusions, credits, & deductions. They result in revenue forgone. This report is part of an effort to assist Congress in reexamining & transforming the gov't. to meet the many challenges & opportunities that we face in the 21st century. This report describes: (1) how tax expenditures have changed over the past 3 decades in number, size, & in comparison to fed. revenue, spending, & the economy, & (2) the amount of progress made since 1994 recommend. to improve scrutiny of tax expend. Includes recommend. Charts & tables.