The New York Democrat reported to CNN that the former vice president should stray away from naming nominees to his Cabinet and administration with "an austerity mindset."
"If we win the Senate, then I do think the administration should be open to more aggressive appointments or rather appointments who would support a more aggressive agenda to help working families," Ocasio-Cortez said.
Even as President Trump is contesting the results of the election, Biden is already in the midst of announcing his nominations and appointments to top positions for his incoming administration. There are already some controversial picks subject to GOP opposition, including longtime Democratic operative Neera Tanden, who will need Senate confirmation to become director of the Office of Management and Budget.
The firebrand liberal lawmaker added that picking people who don't challenge the status quo to head the Democratic Party would be a political mistake.
"I think it's one of the most simply damaging things that could happen to the Democratic Party that would absolutely imperil us in 2022 is if we had a bunch of austerity people, or an austerity strategy and austerity mindset," Ocasio-Cortez commented.
Control of the Senate will be determined by two runoff elections in Georgia on Jan. 5. Both parties are aggressively fundraising and campaigning on behalf of their candidates.
Republican Sen. David Perdue will face Democrat Jon Ossoff after the incumbent failed to meet the 50% threshold needed to avoid a runoff election last month. Sen. Kelly Loeffler will face Democrat and pastor Raphael Warnock. Loeffler secured her way through a crowded race, which included GOP Rep. Doug Collins.
If Republicans lose both contests, the chamber would be split 50-50, with Democrats and the two independents who caucus with them having the advantage of a tie-breaker in Vice President-elect Kamala Harris. Democrats will retain control of the House next term, but by a slimmer margin.
Reports emerged earlier this week suggesting that Mr Reed, who also served in the Obama administration, was top of the president-elect's list to head up the OMB.
But campaigning organisations and some on the left of the Democrat Party - congresswomen Ocasio-Cortez and Omar some of the most high-profile among them - oppose the move.
Following the news, Justice Democrats, a political action committee, launched a petition calling on the Biden/Harris transition team to "prioritize working people, not Wall Street deficit scaremongers".
"Joe Biden must not repeat Obama’s mistake," the petition reads. "Rejecting Reed will be a major test for the soul of the Biden presidency."
Tensions between the two wings of the Democratic Party have been simmering in recent weeks.
The left of the party is calling on Mr Biden to include some of its representatives in his top team, arguing that it was support for more progressive candidates that put him in the White House.