Beat butter with electric mixer in large bowl until light and fluffy. Add cornstarch and 1/3 cup powdered sugar; beat at low speed until moistened. Beat at high speed until light and fluffy. Add flour; mix until dough forms. Cover with plastic wrap; refrigerate at least 1 hour for easier handling.
Heat oven to 350°F. Shape dough into 1-inch balls; place 1 inch apart on ungreased cookie sheets.
Bake at 350°F. for 9 to 15 minutes or until cookies are very light golden brown. Cool 1 minute; remove from cookie sheets.
In small bowl, combine 3 tablespoons powdered sugar and both decorator sugars; mix well. Carefully roll warm cookies in mixture.