Special equipment: 6 large pastry bags; a pastry bag fitted with a small round tip; a 10-inch and 6-inch cake board; a fondant smoother; 5 large wide plastic straws
For the cake: Preheat the oven to 375 degrees F. Spray the bottom and sides of three 10-inch round cake pans and three 6-inch round pans; dust with flour, and tap out the excess.
Whisk together the flour, baking powder and salt in a medium bowl; set aside.
Beat the butter, granulated sugar and oil in a large bowl with an electric mixer on medium-high speed until light in color and fluffy, about 5 minutes. Beat in the eggs, one at a time, then the vanilla and orange zest.
Transfer the creamed mixture to a very large mixing bowl, then alternate folding the flour mixture and the milk into the batter with a large whisk or spatula, adding the flour in 3 additions and the milk in 2, starting and ending with the flour, just until smooth.
Divide the cake batter among 6 different bowls and color each with a different rainbow color using gel food coloring. Add 1 color batter to each of 6 large pastry bags without tips. Add the batter evenly to all the pans by snipping the ends of pastry bags and piping into the center of each pan with 1 color, then repeating with the remaining colors, taking care to always pipe the batter directly into the center of the pan.
Bake the cakes, rotating the pans halfway through, until a toothpick inserted in the centers comes out mostly clean with some moist crumbs sticking to it, 20 to 30 minutes (the 6-inch cakes will be closer to 20 minutes; the 10-inch cakes will be closer to 30). Cool the cakes in the pans on a rack for 10 minutes, then remove the cakes to the rack to cool completely.
For the American buttercream: In the bowl of a stand mixer fitted with the whisk attachment, combine the butter, confectioners' sugar, milk, vanilla if using, and salt. Whip the mixture on low speed for a while. When the sugar is incorporated, turn the mixer speed up and whip until the buttercream is smooth and looks right to you. It it's too wet, add a bit more confectioners' sugar. If it's too stiff, add a bit more butter. Be sure to scrape the sides of the bowl once or twice to make sure everything is combined.
Use immediately or store in an airtight container at room temperature for 24 hours, or in the fridge for up to 2 weeks. Rewhip cold buttercream before using it.
For the royal icing: Using a stand mixer fitted with the whisk attachment, whip most of the confectioners' sugar with the egg whites and lemon juice. Whip until the royal icing holds its shape and is bright white (not translucent), 5 to 8 minutes. If it is too soft, add more confectioners' sugar. If it is too stiff, add a bit of water, drop by drop. Add a few drops of food coloring and keep whipping until you have the shade you want.
To store royal icing, scrape it out of the bowl and into a plastic, disposable piping bag, then leave it at room temperature. (Don't cut the bag until you're ready to use it, and don't overfill the bag¿you want enough room to tie the back of the bag off to keep the royal icing airtight.)
To assemble the cake: Use a serrated knife to level off the tops of any cakes that may have domed during baking. Place a 10-inch cake layer onto a cardboard cake board and spread about 3/4 cup buttercream in an even layer on top. Top with another 10-inch cake layer and repeat until all 10-inch layers are stacked. Use the buttercream to spread a thin even crumb coat on the side and top of the cake. Repeat this process with the 6-inch layers and place both cakes in the fridge so the frosting sets, about 30 minutes.
Roll 3 pounds fondant into a circle about 1/4-inch thick. Drape over the top of the 10-inch cake and use a fondant smoother to adhere and smooth the sides and top. Use a paring knife to make a small "x" in the top of the cake to remove any air trapped inside as you smooth the fondant. Use a pizza cutter to trim the excess fondant from the bottom of the cake. Repeat this process with the 6-inch cake using the remaining 2 pounds fondant.
Into the center of the 10-inch cake, insert 5 large wide plastic straws straight down through to the bottom (these will support the 6-inch cake on top, so make sure the straws are arranged in a circle no bigger than 6-inches in diameter). Trim the straws with scissors so they are flush with the top of the cake. Stack the 6-inch cake on top of the 10-inch cake. Fit a small round tip onto the pastry bag with the royal icing, then pipe a border along the bottom of both cakes. Adhere dragees in a scattered pattern all over the cake using tiny dots of royal icing. Roll a small piece of fondant and cut as many leaves as you like, then adhere to the cake with a tiny dab of water or royal icing. Sprinkle the entire cake with edible glitter.
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