Buttery Cut-Out Cookies

1 cup butter, softened
1 (3-ounce) package cream cheese, softened
3/4 cup granulated sugar
1 large egg
1 teaspoon vanilla extract
3 cups all-purpose flour

Combine all cookie ingredients except flour in large mixer bowl. Beat at medium speed, scraping bowl often, until creamy (3 to 4 minutes). Reduce speed to low; add flour. Beat until well mixed (2 to 3 minutes).
Divide dough in half; wrap in each half in plastic food wrap. Refrigerate until firm (at least 2 hours).
Heat oven to 375°F.
Roll out dough on lightly floured surface, one-half at a time (keeping remaining dough refrigerated), to 1/4-inch thickness. Cut with 2 1/2-inch cookie cutters. Place 1 inch apart onto ungreased cookie sheets.
Bake for 7 to 10 minutes or until edges are very lightly browned.
Makes 3 1/2 dozen cookies.