Instructions

For the cookies: In medium bowl, whisk together flour, baking powder, baking soda, and salt. In small bowl, whisk together egg and vanilla.
Add sugar to food processor and lock lid into place. Turn on processor and process until sugar is finely ground, about 30 seconds.
Stop processor and remove lid. Add chilled butter to processor and lock lid back into place. Turn on processor and process until smooth, about 30 seconds.
Stop processor and remove lid. Add egg mixture and flour mixture and lock lid back into place. Turn on processor and process until no dry flour is visible and mixture forms crumbly dough, about 30 seconds.
Stop processor, remove lid, and carefully remove processor blade (ask an adult for help). Use rubber spatula to transfer dough to center of large sheet of parchment paper on counter.
Use your hands to pat dough into 7-by-9-inch oval. Place second large sheet of parchment on top of dough. Use rolling pin to roll dough into 10-by-14-inch oval (⅛ to ¼ inch thick), rolling dough between parchment.
Slide dough (still between parchment) onto 1 baking sheet. Place baking sheet in refrigerator and refrigerate until dough is firm, at least 1½ hours.
While dough is chilling, adjust oven rack to lower-middle position and heat oven to 300 degrees. Line second baking sheet with parchment.
When dough is ready, remove dough from refrigerator. Gently peel off top sheet of parchment. Use cookie cutters to cut dough into shapes. (After cutting out your cookie shapes, put all the leftover dough scraps together, reroll the dough between sheets of parchment paper to ⅛- to ¼-inch thickness, and cut out more shapes. It’s best to do this only one time—if you reroll this dough more than once, the cookies will turn out tough.)
Use spatula to transfer shapes to parchment-lined baking sheet, spaced about ½ inch apart. (If dough becomes too warm and sticky to transfer shapes easily, return it to refrigerator to firm up again, about 10 minutes.)
Place baking sheet in oven. Bake cookies until beginning to brown around edges, 18 to 22 minutes.
Use oven mitts to remove baking sheet from oven and place on cooling rack (ask an adult for help). Let cookies cool completely on baking sheet, about 30 minutes.
For the glaze and decorations: While cookies are cooling, in second medium bowl, combine confectioners’ sugar, milk, softened cream cheese, and food coloring (if using). Use clean rubber spatula to stir until very smooth.
Glaze and decorate cookies following photos, “Step-by-Step: How to Glaze and Decorate Cookies,” below. Let glaze dry completely, about 30 minutes, before serving.