Whisk whipping cream and cream cheese in small bowl until smooth.
Combine sugar and 2/3 cup water in heavy medium saucepan. Stir over medium-low heat until sugar dissolves. Increase heat to high; boil without stirring until syrup is deep amber color, occasionally brushing down sides of pan with pastry brush dipped in water and swirling pan, about 10 minutes.
Slowly and carefully whisk in cream cheese mixture (caramel mixture will bubble vigorously). Add butter; whisk until mixture is smooth, about 1 minute.
Remove from heat; cool caramel icing 10 minutes, whisking occasionally.
Makes enough for one 9 in layer cake, plus leftovers for serving.