In a mixing bowl beat butter and cream cheese with an electric mixer on medium to high speed for 30 seconds. Add about half of the flour, the sugar, egg, baking powder, and vanilla. Beat till thoroughly combined. Beat in remaining flour. Cover, chill 1 hour or till easy to handle.
Divide the chilled dough in half. On a lightly floured surface, roll half of the dough at a time 1/8 inch thick. Cut into desired shapes with a 2-1/2 inch cookie cutter. Place one inch apart on an ungreased cookie sheet. Bake for eight minutes or until edges are lightly browned. Cool cookies on a wire rack. Makes about 60 cookies.
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