After rolling out a thick snake for the blue and making it the same length as my red/white dough, I achieved a straight angle by using a ruler and fondant smother.
This is how I did it before I thought of an easier way. I assembled my pieces, flipped the entire thing over and cut off the excess...so, you decide which way you think is easiest for you :-). The third picture, I'm just using a serrated edged knife to scrape out the pieces of red in my white dough...I like things to be neat.
After my cookies cooled I brushed some edible glue on the blue and sprinkled with white non-perils for stars.
You'll have some extra dough so here is what I did with it after I pulled it apart and picked the red out of my white dough. I rolled the red into a square, cut white strips and laid that across the red (rolled over it gently to secure the white strips) and used two square cookie cutters, one for the cookie shape and the other for the blue. Waste not, want not :-).