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Preheat the oven to 350°F. Cream butter, cream cheese and sugar until all three are blended. Beat in the egg and the vanilla extract. Grab another bowl and mix the flour, milk powder and baking powder. When those are combined, gradually mix them into the butter mixture. This will produce a dough; chill the dough for 30 minutes to make it slightly firm.
Scoop out level tablespoons of dough. Shape each into a ball, and roll them in the confectioners' sugar. Line baking sheets with parchment paper and place the balls 1 inch apart on the paper.
Bake the cookies for 10 to 12 minutes; they should have developed crinkles and turned a light brown. Move the finished cookies off the pans and onto a wire rack to cool.