In a medium mixing bowl, beat butter and cream cheese with an electric mixer on medium speed for 30 seconds. Add powdered sugar and baking powder; beat until combined. Beat in egg and vanilla. Beat in as much flour as you can with the mixer. Stir in remaining flour with a wooden spoon. Divide dough in half. Cover and chill for 1 hour or until easy to handle
Roll each portion of dough on a lightly floured surface until 1/8 inch thick. Cut dough with a floured holly-shape cutter. Arrange cutouts 1 inch apart on an ungreased cookie sheet
Bake in a 375 degree F oven for 8 to 9 minutes or until edges are set. Transfer to wire racks to cool.
Meanwhile, for the frosting stir together the 2 cups powdered sugar and 2 tablespoons milk. Add additional milk, 1 teaspoon at a time, until icing reaches drizzling consistency. Tint green with food coloring. Use about three-fourths of the icing to glaze tops of cookies. Add additional food coloring to make remaining icing bright green. Using a decorating bag fitted with a fine writing tip, outline cookies with bright green icing. Press cinnamon candies onto each cookie. Makes about 42.