Mix all dry ingredients together in the bowl of the mixer. In a separate bowl, mix together the milk, oil, vinegar and eggs, 1 teaspoons vanilla and food coloring. Add the liquid ingredients to the dry and mix just until everything is smooth. Pour the batter into 2- 8 inch or 2- 9 inhc pans that have been greased and floured well. Bake at 350 for about 30 minutes or until a toothpick comes out clean. Turn cakes out and let them cool completely. Combine cream cheese, margarine powdered sugar and vanilla to make frosting. Frost in between layers and all over the outside.