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The final dough will be slightly softer than most cookie doughs. For the best results, handle the dough as briefly and gently as possible when shaping the cookies. Overworking the dough will result in flatter cookies.
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Adjust oven rack to middle position and heat oven to 350 degrees. Line 2 rimmed baking sheets with parchment paper. Whisk flour, baking powder, baking soda, and salt together in a medium bowl; set aside.
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Place 11/2 cups sugar and cream cheese in large bowl. Place remaining 1/3 cup sugar in a shallow dish and set aside. Pour melted butter over sugar and cream cheese and whisk to combine (some small lumps of cream cheese will remain but will smooth out later). Whisk oil in until incorporated. Add egg, milk, and vanilla and whisk until smooth. Add flour mixture and mix with rubber spatula until soft, homogeneous dough forms.
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Divide dough into 24 even pieces, about 2 tbsp each. Using your hands, roll dough into balls. Working in batches, roll balls in reserved sugar to coat and evenly space on prepared sheets, 12 balls per sheet. Using bottom of drinking glass, flatten galls to 2 inches in diameter. Sprinkle tops of cookies evenly with 4 tsp of remaining sugar. Discard any remaining sugar.
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Bake cookies 1 sheet at a time until edges are set and just beginning to brown 11-13 minutes, rotating sheet 1/2 through baking. Let cookies cool on sheet for 5 minutes, then transfer to wire rack. Let cookies cool completely before serving (fat chance!).
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